Which type of mortgage lender primarily raises capital through stock and securities offerings?

The correct answer is mortgage banker. A mortgage banker is a financial institution or an individual that originates, processes, underwrites, and funds mortgage loans. Unlike other types of lenders, mortgage bankers primarily raise capital through the issuance of stocks and securities. They typically use this capital to fund the loans they originate, which they may then sell to investors or hold in their portfolios.

Moreover, mortgage bankers often operate under a more flexible funding structure, allowing them to secure the necessary capital for a variety of loan products by accessing the capital markets and issuing securities. This is a crucial distinction because it enables them to manage larger volumes of loans and provide borrowers with a broader range of mortgage options.

In contrast, banks and savings and loan associations generally obtain funds through traditional deposit accounts and offer a wider variety of banking services. Mortgage brokers, on the other hand, do not lend their own funds but act as intermediaries between borrowers and lenders, helping clients find loan options from various lending sources.