A practical roadmap for mortgage brokers and loan officers who want to close loans in their own name, and how to get there faster with a partner like TAG Lending Group.
Short answer: To become a correspondent lender, you need a licensed mortgage lender entity, enough capital and audited financials to meet investor and agency net worth rules, a warehouse line of credit to fund loans, written quality control and compliance policies, and approval from the investors who will buy your loans. Most companies start non-delegated, where the investor underwrites each file before closing, and move to delegated once they have volume and a clean track record.
A correspondent lender originates the loan, closes it in its own name, funds it, usually from a warehouse line, and then sells it to an investor. A mortgage broker, by contrast, closes in the lender's name and never funds the loan. Moving from broker to correspondent gives you more control over the file, the closing and the investor relationship, along with more responsibility and capital at risk.
| Model | Closes in | Funds with | Who underwrites |
|---|---|---|---|
| Mortgage broker | Lender's name | Lender's money | Lender |
| Non-delegated correspondent | Your name | Your warehouse line | Investor, before closing |
| Delegated correspondent | Your name | Your warehouse line | You, to investor guidelines |
Form the company, get the company license in each state where you will lend (state lender licenses are separate from broker licenses), and register the company and its loan officers in NMLS.
Investors, warehouse banks and agencies set minimum net worth and liquidity requirements, and most want CPA-audited financial statements. Requirements vary by investor and loan type. Government lending usually carries higher thresholds.
A warehouse line funds your loans at closing until the investor purchases them. Warehouse banks review your capital, experience, policies and investor approvals.
Build a quality control plan, compliance management system, AML program, information security policy and vendor management. Carry the errors and omissions coverage and fidelity bond your investors require.
Apply with investors as a non-delegated correspondent first. The investor underwrites each loan before you close, which lowers your risk while you build performance history.
You will need a loan origination system, processing, closing, post-closing and loan delivery staff, and a way to track purchase suspense and early payment defaults. Many lenders add secondary marketing later.
With consistent volume and clean quality control results, investors may grant delegated underwriting, so you can approve loans to their guidelines yourself.
Building a correspondent shop takes capital, licensing time and staff. TAG Lending Group is a wholesale and non-delegated correspondent lender based in Miami with access to 100+ investors. Licensed brokers and loan officers can work with our team through our wholesale channel and Co-Org Loan structure, using our licensing, warehouse funding, investor relationships and technology while they decide whether building their own correspondent operation makes sense. See wholesale lending with TAG and why loan officers and brokers work with TAG.
A broker closes loans in the lender's name using the lender's money. A correspondent lender closes in its own name, funds the loan, usually with a warehouse line, and then sells it to an investor.
The correspondent closes and funds the loan, but the investor underwrites and approves the file before closing. It is the usual starting point for new correspondent lenders.
In most cases, yes. The warehouse line funds loans at closing until the investor buys them. Some investors offer table funding, but a warehouse line is the standard setup.
It depends on state licensing timelines, how quickly you complete audited financials, and investor and warehouse approvals. Plan for several months, not weeks.
Yes. Licensed brokers and loan officers can partner with TAG through our wholesale channel in the states where TAG is licensed, without building a correspondent operation first.
This page is general industry information for licensed mortgage professionals, not legal, licensing or financial advice. Requirements vary by state, investor and agency. TAG Lending Group, LLC, NMLS #2329372, is a mortgage lender in FL, GA, MI, NM, OH, SC, TN and TX, and a mortgage broker only, not a mortgage lender or correspondent lender, in CT, NJ and PA. Equal Housing Opportunity.