The Consumer Financial Protection Bureau's guidance on the growing mortgage mini-correspondent business has scared some originators to the point that they are considering converting to branches of larger retail lenders.

"I've gotten a couple of calls from mini-correspondents asking to become branches. There is a lot of concern among the newly converted mini-correspondents given this new guidance," says Daniel Jacobs, who is president of the national retail lending division of American Financial Network, based in Chino Hills, Calif.

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