Great question. From nearly 20 years of experience in the finance industry and working in each of the categories mentioned above, this is what I have come up with:
You are really looking at Bank, Broker or Correspondent Lender with the ability to be a Direct Lender as well.
Bank - One stop source for all financial needs, they do volume work but are limited to one loan source and often have trouble with buyer and response timelines (they do not typically respond nights, weekends or holidays;
Broker - Great variety of sources with multiple programs to reach a more diverse clientele, the issue here is timelines as well. More responsive then banks on a loan officer to client level, they can only shop lenders on a specific day and then make a determination as to who to send it to based on that day's priciing. Once the loan is sent out, they lose control of the loan package. Depending on where it is sent and that particular lenders's workload, meeting contingency and close of escrow timelines can ge a challenge.
Correspondent Lender - This is the institution I work for and I will tell you how I ended up here after years of being both a broker and a loan officer with a bank. As a Correspondent Lenders, many of the institutioins we work with have trained and certified our own underwriters as being able to underwrite the loans in-house. This is very important. We now control timelines and have the ability to check on loans, their status, their approval and more as we process the loan without having to send the package out to any one particlular lender. On top of that, once we have Fannie Mae approval on the loan, I can watch and moniter multiple lenders in house, comparing the rates as the days and the economy roll, locking at the most opportune time instantly while shopping rates online. On top of that, we are a direct lender as well which means we can not only fund our own loans, but can also fund the loans for all the lenders we underwrite for - a tremendous time savings as well. By the way, I can also broker loans out if needed as well. Not my first choice, but I have that option if there is a niche program that none of the lenders we underwrite for carry.
Closing costs for most lenders are comparable, so my preference will always be to work with this type of lender to the benefit of my clients.
Hope this helps my friend.