What is the difference between correspondent lending and warehouse lending?

Correspondent lenders are small lenders who do have the right to extend loans on their own risk. After a loan is closed, a correspondent lender will most likely sell the loan to a larger wholesale lender. Warehouse lending is a short-term revolving line of credit provided to a mortgage banking company to fund the closing of mortgages from the closing table to sale in the secondary market. The mortgage note is used as collateral for interim financing until the mortgage is sold and delivered to the permanent investor.

Hello, Correspondent lending means there is a bank in between the servicer who is funding on their own funds but selling the loan to the larger bank. Warehouse is pretty much the same thing because you fund off your "warehouse" line. Meaning your own funds. So essentially I feel you are speaking about the same thing just another way of describing it. There is Wholesale Lending and this is when a broker who is approved with several investors will shop the various relations and deliver you the best loan for your needs. This is also done with Correspondent Lending however, when a bank has several lenders and fund off their own warehouse line they want to be sure they can hedge or bulk sell loans so they often lay a strict overlay on top of the guidelines. This means the file sometimes has to be documented more than necessary for those who sell direct with no overlays. I would be happy to explain more in detail. Team@AmericaChoiceMortgage.com 888-226-8840