Correspondent Bright, Wholesale Not So Much

It may be premature to declare the death of wholesale mortgage lending in America, but certainly it would appear that the future looks exceedingly bright for correspondent lending. We know of at least one large net branch (broker) that recently became a mortgage banker and is boasting as much to its customers. Meanwhile, stories abound about lenders planning conduits or hiring executives to explore such possibilities. But what does this really mean for rank and file brokers and small mortgage banking firms? Well, it boils down to this: cash is king. If your firm can muster the $2.5 million minimum capital requirement of Fannie Mae/Freddie Mac/FHA you’re way ahead of the game. If not, the opposite may be true. Stay tuned…