Welcome to the Wild West!
Let’s be honest. Right now, it’s like the Wild West out there. The ability to give sub lines to aspiring mortgage bankers may be getting out of hand. Yes, mini-correspondents/emerging bankers bring a lot to the table. I applaud lending companies and banks who are making use of this growing new segment. At the same time, I know of bankers who do all of the work for their low net worth mini correspondents, including underwriting, processing and doc prep and don’t require any recourse from their client. There’s a fine line between being an “emerging banker” and running afoul of the law. And I’m seeing some who are jumping right over that line.
It is so important to do things right. Don’t be too surprised when the CFPB or other enforcement agencies start looking at these sham arrangements. The results will be bad for both the mini-correspondent and the lender providing the line.