AgentMortgage

Correspondent lenders: Another choice for home financing

How wholesale prices, rebate disclosure affect decision
Published on Sep 18, 2006

"Please explain the difference between a mortgage lender, mortgage broker and correspondent lender." Lenders and brokers both perform a variety of loan origination tasks, which include finding, counseling and qualifying borrowers, taking applications, checking credit, and verifying employment and assets. But the lender is the one who must approve the deal and disburse the money to the borrower. Mortgage brokers usually are not authorized to provide final loan approval, nor do they disburse money. But let's muddy this up a little. Suppose that at closing, the lender lends the broker enough money for the broker to fund the loan in his own name, then 10 minutes later when the transaction is completed, the broker sells the loan to the lender. Would this convert the broker into a lender? If we define "lender" as the entity who disburses funds to the borrower and receives back a note and mortgage, then the answer has to be "yes." In fact, the practice I just described is fairly common; it ...

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