Mortgage Process in the U.S.

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In USA the process through which a Mortgage is secured by the borrowers are called origination. Here the borrower submits an application and documentation relating to his/her financial history to the underwriter. Presently many banks are now offering "no-doc" or "low-doc" loans in which the borrower is required to submit only minimal financial informations. Such type of loans carry comparatively higher interest rate and are available only to borrowers having excellent credit. Sometimes a third party is involved called the Mortgage Broker.

Loans are sometimes sold in the open market to larger investors by the originating mortgage company. There are some companies, called correspondent lenders who sell all or most of their closed loans to these investors, by accepting some risks for issuing . Some times they offer niche loans by higher prices which the investor does not wish to originate.

This aggressive process has not caused havoc on the U.S. real estate market. Often times these "no-doc" loans are considered to predatory. With the U.S. real estate market collapsing, many people are having difficulty in making their monthly payments. Coupled with increases in property taxes and higher insurance rates, one can only wonder when the bottem will completely fall out and a total restructuring of the economy will take place.

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