Do you know what a Third Party Originator is? The new name for Correspondent Lenders…
The “Mortgage Broker Business” and “Correspondent Lender” Licenses are now EXTINCT! Some will get upset at what I just said, but it’s the truth. In FHA’s eyes if you are not a LENDER then you are a Third Party Originator or TPO.
TPOs have no control of the process because the lender now has full liability for the actions of the TPO. I am not saying that the Mortgage Broker Business is completely gone, but this is only for FHA. But what else is out there today? Conventional loans are now using “risk based pricing” which means much much higher rates than that of FHA, even if you count the Mortgage Insurance Premium.
So as we see a shift to FHA being the main player in the industry, where does that leave TPOs? I leave that for you to decide. This year will tell us a lot in our industry!