Question:

What is correspondent mortgage lending?

Answer:

When an institution is authorizing loans on behalf of a certain wholesale mortgage lender, they practice the so-called correspondent mortgage lending. In other words correspondent mortgage lending serves as mediator between wholesale mortgage lenders and borrowers, including underwriting and loan servicing.

Correspondents act much as brokers in various cases and can easily be mistaken.

A notable difference, however, is that a correspondent mortgage lender will often be in a closer relationship with certain larger lender to whom they sell their loans. This lender will be the correspondent's sponsor and will further be reselling loans to secondary market mortgage players, such as Fannie Mae and Freddie Mac.

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Common misspellings: mortage and morgage