Mortgage Banker

A company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. After a mortgage is originated, a mortgage banker might retain the mortgage in portfolio, or they might sell the mortgage to an investor. Additionally, after a mortgage is originated, a mortgage banker might service the mortgage, or they might sell the servicing rights to another financial institution. A mortgage banker's primary business is to earn the fees associated with loan origination. Most mortgage bankers do not retain the mortgage in portfolio.

Investopedia Says:
Larger mortgage bankers service mortgages, while smaller mortgage bankers tend to sell the servicing rights

The distinguishing feature between a mortgage banker and a mortgage broker is that mortgage bankers close mortgages in their own names, using their own funds, while mortgage brokers facilitate originations for other financial institutions. Mortgage brokers do not close mortgages in their own names.

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Company, or individual, that originates mortgage loans, sells them to other investors, services the monthly payments, keeps related records, and acts as escrow agent to disperse funds for taxes and insurance. A mortgage banker's income derives from origination and servicing fees, profits on the resale of loans, and the spread between mortgage yields and the interest paid on borrowings while a particular mortgage is held before resale. To protect against negative spreads or mortgages that can't be resold, such companies seek commitments from institutional lenders or buy them from the Federal National Mortgage Association or the Government National Mortgage Association. Mortgage bankers thus play an important role in the flow of mortgage funds even though they are not significant mortgage holders.

One who originates, sells, and services Mortgage loans. Most loans are insured or guaranteed by a government agency or private mortgage insurer. See Mortgage Insurance.
Example: The Mortgage Store, a mortgage banker, originates 100 loans totaling $20,000,000. They sell this package of loans to an out-of-state investor for $20,400,000. They continue to collect monthly payments from homeowners and assure that property taxes are paid and insurance is maintained. They charge the investor an annual fee of 38 of 1% of the loan Principal each month remitting to the investor the rest of the monthly payments from homeowners.