Richard Thomas,
Agent, Edgewater, MD
Sandy,
I work for a correspondent lender and no it is not another name for sub-prime. There are no inherent risks in dealing with correspondent lenders. Basically what a correspondent lenders is, is a mortgage company that funds the loan initially then sells the loan to a "National lending company" i.e. Countrywide, Wells Fargo, Suntrust etc. The advantage of using a correspondent lender is (1) you generally get more personalized service then if you walked into a bank and (2) they will shop all of these National lenders to get you the most competitive rate. If you walked into your bank you would only get the rate they offer.
The lender you are working with already has the sale lined up with the National lender because during the loan process they have to adhere to that lenders specific guidlines in order to complete the transaction. So your lender may have already mentioned that your laon will be with "National Mortgage company A" which is normal but your closing docs will have the correspondent lender's name on it.
Good Luck with your transaction!
I work for a correspondent lender and no it is not another name for sub-prime. There are no inherent risks in dealing with correspondent lenders. Basically what a correspondent lenders is, is a mortgage company that funds the loan initially then sells the loan to a "National lending company" i.e. Countrywide, Wells Fargo, Suntrust etc. The advantage of using a correspondent lender is (1) you generally get more personalized service then if you walked into a bank and (2) they will shop all of these National lenders to get you the most competitive rate. If you walked into your bank you would only get the rate they offer.
The lender you are working with already has the sale lined up with the National lender because during the loan process they have to adhere to that lenders specific guidlines in order to complete the transaction. So your lender may have already mentioned that your laon will be with "National Mortgage company A" which is normal but your closing docs will have the correspondent lender's name on it.
Good Luck with your transaction!
Web Reference: http://hcimaryland.com
Sandy,
Correspondent lenders are mortgage brokers that have an arrangement with larger lenders to underwrite and approve their loans. Larger lenders use this channel to minimize overhead and pass the savings on to you as the consumer. The Correspondent lender is more at risk for the loan initially as they usually sign an agreement with the end bank that in case of a loan default within a specified period of time (usually 30 to 60 days of transfer) the mortgage broker has to buy the loan back. This also mitigates some of the risk associated with lending as the broker needs to be 100% sure you are a credit worthy borrower.
When all is said and done, you should be getting the absolute lowest possible rate by going this route in financing your home. Most loans are sold between banking entities in one form or another. The most important thing is for you to examine the note/mortgage at closing to assure you have exactly what was sold to you from the beginning. The bank you write your check to may change hands many times, all based on that note/mortgage and your consistent ability to satisfy your monthly obligation.
I hope this helps & congratulations on youor closing.
Correspondent lenders are mortgage brokers that have an arrangement with larger lenders to underwrite and approve their loans. Larger lenders use this channel to minimize overhead and pass the savings on to you as the consumer. The Correspondent lender is more at risk for the loan initially as they usually sign an agreement with the end bank that in case of a loan default within a specified period of time (usually 30 to 60 days of transfer) the mortgage broker has to buy the loan back. This also mitigates some of the risk associated with lending as the broker needs to be 100% sure you are a credit worthy borrower.
When all is said and done, you should be getting the absolute lowest possible rate by going this route in financing your home. Most loans are sold between banking entities in one form or another. The most important thing is for you to examine the note/mortgage at closing to assure you have exactly what was sold to you from the beginning. The bank you write your check to may change hands many times, all based on that note/mortgage and your consistent ability to satisfy your monthly obligation.
I hope this helps & congratulations on youor closing.
Web Reference: http://www.guardhill.com
