Question:

Correspondent Lending Definition

Answer:

Correspondent lenders are small lenders who do have the right to extend loans on their own risk and have the necessary funds to do so, unlike mortgage brokers who will often only shop loans for the borrower. However, after a loan is closed, a correspondent lender will rarely keep it in their portfolio. Rather, they will sell it to a larger wholesale lender they operate in close partnership with.

Sometimes a correspondent lender will work with several larger lenders.

A loan provider may act both as a lender and a broker, and as some brokers also have the right to close a loan in their name, it is not always clear whether you are dealing with a mortgage broker or with a correspondent lender.

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