What is a correspondent lender?
Answer:A borrower who knows what is a correspondent lender and how they differ from brokers will also feel confident to require the loan provider (lender or broker) to disclose the wholesale price of the loan and their fee for the service. Borrowers who do not know the difference between wholesale lenders, correspondents and brokers may run into greater broker/lender fee, since under the law lenders as such are not required to disclose rebate points while brokers are obligated to quote their markup over the wholesale loan price.
Shortly, a correspondent lender is a broker who has accumulated enough capital and confidence to obtain a credit line from a bank and start extending money on their own judgment. Correspondents will usually sell the loan to a wholesale lender they have business relationship with and will often be working with more than one wholesale lender, much as brokers would. Often, a company may be working as a lender in one state, and as a broker in others.
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