Either way, the loan is usually underwritten by the sponsor. It is almost like being a mortgage broker, except that there is usually a very strong relationship between the correspondent and their sponsor. Mortgage Brokers Mortgage Brokers are companies that originate loans with the intention of brokering them to lending institutions. A broker has established relationships with these companies. Underwriting and funding takes place at the larger institutions.
Many mortgage brokers are also correspondents.
Mortgage brokers deal with lending institutions that have a wholesale loan department. Most mortgage bankers and portfolio lenders also act as wholesale lenders, catering to mortgage brokers for loan origination. Some wholesale lenders do not even have their own retail branches, relying solely on mortgage brokers for their loans. These wholesale divisions offer loans to mortgage brokers at a lower cost than their retail branches offer them to the general public. The mortgage broker then adds on his fee.