The term "mortgage banker" can be used to describe companies from "all facets of the real-estate finance industry," according to the Mortgage Bankers Association, which represents a wide range of housing and commercial financing firms.

However, a reference to an "independent mortgage banker" is more likely to specifically apply to a nondepository institution that funds single-family mortgages using lines of credit or other sources of financing from third parties. These companies most commonly obtain this financing from entities known as warehouse lenders. Warehouse lenders are often banks.

IMBs typically sell their closed loans off to government-related or private investors in the secondary market rather than holding them in portfolio. While this is a strategy nonbanks may rely more heavily on, depositories also may utilize originate-to-sell strategies.

Mortgage bankers are able to generate profits when they can sell their loans for more than it costs to originate, fund and manage them.