This is a good — and frequently asked — question.
To understand what’s going on now, you have to know at least the fundamentals of how the mortgage industry operates.
When a lender underwrites, approves and finds a loan application, they do so with the intent of selling that loan on the secondary mortgage market. Fannie Mae and Freddie Mac are two of the best-known participants, although there are many more.
The lender sells the newly-funded loan at a profit — over the face amount of the loan. …