In my second book, Mortgages 101, I spent considerable time explaining the basic differences between a mortgage broker and a mortgage banker. I spent as much time explaining the similarities while trying to answer the question, "Who's better for me, a broker or a banker?"

I've been both, a broker and a banker. There are some distinct differences, but maybe the general public doesn't know the most important differences. After all, it's still a super-secret gig, this money-lending thing, right?

The most common difference you hear from brokers is that they "shop" your mortgage around to find the best rate. That's true. But another common claim is something such as, "We're signed up with over 100 lenders and we find the best rate and terms available!" That might be true.

I don't know if there are 100 mortgage lenders and if there were I don't know of a mortgage company that would sit down and take the time to actually fill out all of the applications. Didn't know that? Mortgage brokers, or more particularly the principal mortgage broker in that company must complete a series of applications, credit reviews, licensing requirements in addition to any online paperwork or background checks.

Lenders who use mortgage brokers to distribute their product are called "wholesale" lenders. Wholesale lenders let the broker do the heavy lifting of find the loan in the first place and in return offer the broker a reduced loan price that he or she marks up to retail level. That's the loan price quoted to the consumer.

And each lender a broker does business with must have the authority to do business with the wholesale lender, and they do that by applying. Much as the consumer would do when applying for a home loan.

All that said, I don't see any need for 100 lenders. I know I'll get email on this but I also don't believe it. Okay, even if a broker did have 100 active licenses with wholesale lenders do you really think they "shop" those 100 lenders each time an application comes through? Of course not. Instead, a broker or loan officer - already familiar with the companies they like to do business with - reviews the rate sheets from their favorite three or four wholesale lenders.

It's common for a broker to have a favorite government lender for FHA and VA loans, another for conventional product and finally a favorite or two from their sub-prime lenders. When a broker gets an application, they don't pore through 100 rate sheets. No, they're more likely to review the three or four they're used to doing business with and pick the best one. No, you weren't shopped to 100 lenders, but you still got a great deal.

Another good reason to pick a broker is that because they have access to so many lenders they might also have access to a particular loan program not available at all the other lenders. While most lenders are alike in the types of product they offer, a few specialize in certain niche areas, and the broker would have access to that product.

A disadvantage a broker has is losing control of the loan once it goes for loan approval. At that point, their loan application is one of hundreds or even thousands that must get underwritten, approved and loan papers delivered.

As a broker, I would have to call my account executive and ask how my loan was doing or even log onto the lender's website to check status. Of course that only works when the lender in fact updates the website.

As a banker, any time there was a problem I was right smack in the middle of it getting it fixed. If a loan were being held up, I would know about it almost immediately when the underwriter would call my processor or me. When a problem arises with a loan through a broker it could take precious hours, even days, to find out exactly what's going on. This is especially true if the broker doesn't generate a whole lot of loan volume every year and may not carry as much stature with the wholesale lender as someone who might deliver 30-40 loans per month. I'll get more nasty emails about that comment but trust me it's true.

Should you choose a broker over a banker? Or is a banker the superior choice? There are advantages to either just as disadvantages. What would I pick if I were buying or refinancing this very moment? That depends. If were a broker, I'd use me. If I were a banker, I'd also use me. The answer is that either makes a good choice. It's the person you're dealing with that's important, not the title on their business license.