A correspondent lender is a small type of lending institution that finds investors to fund mortgage loans for clients. Correspondent lenders do not extend their own funds, but they have access to funds from multiple banks. Unlike brokers, who only find lenders, correspondent lenders are responsible for underwriting and servicing the loan. To become a correspondent lender, you must have certain qualifications.
To become licensed as a correspondent lender, you must be operating as a licensed and registered business entity. Each firm will need at least one principal lending manager with a minimum of one year of experience running a firm. The principal may also need to take a 24-hour course offered through an approved state or federal institution and pass a state exam. Any officers, partners and members must be licensed as mortgage loan originators. Experience prerequisites vary among states. Connecticut requires at least three years of experience in the mortgage business. Correspondent lender licenses require annual renewal.
Anyone who wishes to practice as a correspondent lender will need to complete an application. The application asks for basic information, such as your name, address, and lending experience. Along with the application, you will need to pay a non-refundable deposit. The deposit amount varies among states, but is generally about $500.
Proof of Net Worth and Bonding
The company must present audited financial statements to prove ability to maintain an annual net worth set by the state. In Florida, the net worth requirement is at least $25,000. In New Jersey, the net worth minimum is $150,000. Connecticut requires a net worth of $80,000 or greater. You may also need to obtain a surety bond equal to the net worth requirement.
Most states require corresponding lender applicants to undergo fingerprinting and criminal background checks. The fingerprinting may be performed at your local police department, or you may be required to go through an approved third party. You will be responsible for paying all processing fees. Fingerprinting fees are generally less than $100.
- American Mortgage Licensing: Florida Correspondent Lender License
- State of New Jersey Department of Banking and Insurance: New Jersey Specific Requirements - Correspondent Residential Mortgage Lender
- Surety Solutions: Pennsylvania - New Correspondent Lender Bond Requirement
- Mortgage QNA: What are the Correspondent Mortgage Lender License Requirements?
- Tennessee Department of Financial Institutions: Fingerprint Instructions
- Nationwide Licensing System: Connceticut Mortgage Correspondent Lender License