A Correspondent Lender is a mortgage lender that originates and funds home loans in their own name. Shortly after the loan closes, they sell these loans to larger mortgage lenders who service the loans and may also sell them to the secondary market.

Correspondent lenders employ their own underwriters and initially fund loans with their own money. However, these loans are usually underwritten to guidelines from a larger lender, allowing the loans to be sold quickly after closing to a larger lender. Borrowers who use a correspondent lender will often see that their mortgage bills and payments transfer to a larger bank shortly after closing.