What is the primary role of mortgage banking companies?

The primary role of mortgage banking companies is to collect monthly payments and forward them to the mortgage investor. Mortgage banking companies act as intermediaries in the mortgage lending process. After they originate loans for consumers, they typically service those loans, which involves collecting monthly payments from borrowers on behalf of investors or the owners of the mortgage loans.

When homeowners make their mortgage payments, mortgage banking companies ensure that those payments are processed correctly and sent to the investors or entities that ultimately own the loans. This servicing function is crucial for maintaining the flow of funds in the mortgage market and ensuring that investors receive their expected returns on the loans.

While mortgage banking companies do participate in loan origination and underwriting, their essential function centers around servicing existing loans. Thus, they facilitate the ongoing relationship between borrowers and investors, ensuring that the investment is managed correctly throughout the life of the mortgage.