That’s an interesting question. My first reaction is that it is unusual in my experience for a correspondent lender’s functions to be quite so limited. Obviously, if that really is the sole extent of the correspondent’s action, I would advise to take a look at the Bureau’s guidance on mini-correspondents and ensure you are on the right side of the line and that you are the lender and not functioning as the broker in the eyes of the law. [Note: The CFPB’s policy guidance on mini-correspondents is available at http://files.consumerfinance.gov/f/201407_cfpb_guidance_mini-correspondent-lenders.pdf.]
To answer more directly, when originating a mortgage you are going to have some interaction with venders such as appraisers and settlement agents. I have not come across an instance where the correspondent lender is that divorced from all the activities, but I want to know more about this situation. If it really was limited to that degree, I’d have some concerns about who truly is the lender here.
Note: This transcript has been edited from the January 2015 vendor management webinar for clarity and completeness.
Answered By: Ben Olson