Correspondent Origination

Correspondent Origination

A loan that is originated by a party other than a mortgage loan seller (or its parent company, controlled affiliate, or subsidiary) and is then sold to a mortgage loan seller. A lender correspondent performs the loan processing functions (such as taking loan applications; ordering credit reports and title reports; requesting appraisals; and verifying a borrower's income and employment) without the assistance of a broker. The lender correspondent typically underwrites the loan, but correspondent loans may also include loans where the correspondent has not received delegated underwriting authority from a mortgage loan seller and, accordingly, did not underwrite the loan. The lender correspondent funds the loan at settlement, and the loan is closed in the name of the lender correspondent, which may or may not service the loan.