Understanding Flow-based Correspondent Lending

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We’ve had many inquiries about what direct lenders are and how the bank food chain is set up from top to bottom. To help answer those questions I’ve created a 2 part video that discusses the intracacies of flow-based correspondent lending.

Flow-based lending is typical for small direct, correspondent lenders. Please note that this does not represent all mortgage banking and correspondent banking scenarios it is accurate for smaller flow-based correspondent scenarios.

View the video here.

As always we appreciate your feedback. Stay tuned for the next video in this series which uncovers some of the reasons that people start correspondent lending; and identifies the additional profit centers opened up by the switch.

11 Responses to “Understanding Flow-based Correspondent Lending”

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1 Jim Gilly
Aug 28th, 2007 at 12:36 am

Hi Morgan,

Just got a chance to look at the video. Unfortunately, I had a problem with the audio on my end but the information was still excellent.

Couple of questions for you. You gave an example where the direct lender may sell a $350,000 loan and get paid $350,000 or the may get 2 points and make $7,000.

Why would a direct lender ever sell a loan for just the face amount? Isn’t getting a point or 2 how they make their money for originating the loan in the first place? Where else does the direct lender earn a profit?

Thanks
Jim

PS Are you still going to write an article on the pros/cons of using a mortgage banker versus a mortgage broker?

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