A correspondent lender is a lender who delivers loans to a larger purchasing wholesale lender.

A delegated correspondent lender can originate and underwrite mortgages under their own name.

Shortly after closing, the loans are usually sold to a much larger lender primary lender or on the secondary market.

Should they continue to hold onto the loan, they would collect a servicing fee from the primary lender holding the note.

A non-delegated correspondent lender is one who fund their own loans but the purchasing lender would underwrite it.

This is usually so that the note can be more easily sold on the secondary market as it meets underwriting standards.

Mortgage brokerages and credit unions often become correspondent lenders when they are successful enough to obtain credit lines big enough to close loans themselves.

However even so, they continue to require the support of the primary lenders to protect themselves from volatile interest rate fluctuations while holding onto the loans.