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Converting from a Mortgage Broker/Mini-Correspondent to Delegated Correspondent?

If you are planning to transition from a mortgage broker or mini correspondent to a delegated
correspondent, there are many things to consider. After determining that you have met the net worth
requirements, let’s examine the benefits and risks for delegated correspondents.
Having delegated authority puts you in the most control and with control comes the opportunity to
manage your pricing margins, processes, overlays and customer service fulfillment. A delegated
correspondent should take advantage of industry tools such as a good pricing engine and loan
origination system. These tools are necessary to manage products, guidelines and to handle centralized
secondary desk responsibilities for registering, locking and delivering loans. These tools can also help
you increase profitability.    

It’s important to diversify your investors as you will want to remain flexible and nimble. Does your
investor allow you to straddle channels, i.e., delegated for conventional products, but non-delegated for
jumbo and government products? Does the investor have support teams to help with scenarios, pricing,
guidelines, bid tape, post-closing and delivery questions? Is the investor representative knowledgeable,
accessible and responsive?  

A risk for a delegated correspondent is a loan not being purchased for a non-correctable underwriting,
closing error or not meeting lock terms, as the correspondent assumes the reps and warranties. You can
manage and offset this risk with competent and qualified staff. It is important to have a good quality-
control program and compliance oversight. If hiring and training processors, underwriters, closers and
auditors is a struggle, consider outsourcing some of these activities. It is generally a variable cost vs. a
fixed cost, and a vendor that specializes in these areas will have more expertise and controls in
place. Consider partnerships with vendors that are relationship driven and have a vested interest in your
success.

Here at Gooi Mortgage, we work best with clients who consider us a seamless extension of their team
and are seeking a business continuity plan that allows for efficiencies, consistency and growth. We are
inclusive and focused on our joint goals of exceeding client expectations. If you would like to learn more
about outsourcing and solutions for delegated correspondents, please contact us – we would by pleased
to hear from you and discuss your situation.
By Laura Rosenberger