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Rakhi Vasavada
Rakhi Vasavada , Financial and Legal Consultant
Category: Finance
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Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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Hello,Im not sure if this would be the right forum for this

Resolved Question:

Hello,
I'm not sure if this would be the right forum for this question, but I'm wondering what the difference is between a loan correspondent and a mortgage lender?
Submitted: 3 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 3 years ago.

rakhivasavada :

Dear Friend, Hello and welcome...

rakhivasavada :

Kindly be online as I prepare your reply...

rakhivasavada :

There is a key difference between the two.

rakhivasavada :

A loan correspondent is a person who negotiates loans for conventional lending institutions or other lenders. Correspondents often service the loan for the lender and act as the collecting agents.

rakhivasavada :

Where as, on the other hand, mortgage lender is the lender itself, who takes services of such correspondents.

rakhivasavada :

He is the actual person providing funds for the mortgage.

rakhivasavada :

Hello, are you there ?

rakhivasavada :

I hope this helps...

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Warm Regards,

Customer: replied 3 years ago.

An additional question, how would you interpret the term wholesale table funder in the below section of PA dept of banking law. Would you consider a warehouse line of credit a wholesale table funder if it's just for a short period of time prior to the end investor purchasing the loan?


 


"Mortgage loan correspondent." A person who engages in the mortgage loan business by directly or indirectly originating and closing mortgage loans in his or her own name utilizing funds provided by a wholesale table funder or other funding sources under the circumstances described under section 6123(6)(relating to mortgage loan business prohibitions) and simultaneously assigning the mortgage loans to the wholesale table funder.


 


§ 6123. Mortgage loan business prohibitions.


 


(6) In the case of a mortgage loan correspondent, service mortgage loans or close mortgage loans utilizing funding other than a wholesale table funder, except in an emergency circumstance where wholesale table funding is not available

Expert:  Rakhi Vasavada replied 3 years ago.
Dear Friend,

Let us address it one by one.

Over all, your interpretations are correct.

Wholesale table funder --- he is a licensed mortgage banker or an exempted entity who, in the regular course of business, provides the funding for the closing of mortgage loans through loan correspondents and who by assignment obtains title to such mortgage loans.

In the competitive market place of mortgage lending, table funding plays a key role to establish a level playing field for the small loan originators. This form of wholesale lending has been designed in response to the market conditions and the requirements of the loan originators. Table funding can indeed be beneficial for the small firms who either do not possess a warehouse credit line or whose credit line is too small to handle their loan pipelines. With the help of table funding small firms can restore their identity in the competitive local market.

Also, mortgage correspondent is clearly defined above in under section 6123(6). He is the person who assists and he is in directly or indirectly in mortgage through whom the table lenders close their mortgage deals.

Let me know if I have still not addressed any of your specific query or I have left out anything. Kindly feel very free to revert.

Rate this answer POSITIVELY IF you are done with this and if this helps and satisfies you as this is the only way we get compensated for assisting you. You may use "CONTINUE CONVERSATION" to revert with additional queries if you have or if I have missed out on any aspect of your question.

Warm Regards
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