What is a lender called that makes mortgage loans and sells them immediately to a larger lender under a contract relationship?

A lender that makes mortgage loans and sells them immediately to a larger lender under a contractual relationship is known as a correspondent lender. This type of lender operates in a unique capacity where they fund loans using their own resources but then quickly sell those loans to larger financial institutions, often providing a way for those institutions to increase their lending capacity and for the correspondent lender to generate fees and maintain a relationship with larger entities.

Correspondent lenders play an essential role in the mortgage industry, as they bridge the gap between retail lending and wholesale offerings. They have the ability to underwrite and close loans in their own name, but instead of retaining those loans on their balance sheets, they sell them to larger lenders or investors, who then hold or service the loans.

The other options represent different types of lenders or intermediaries in the mortgage process. For example, wholesale lenders provide funds to third parties (like mortgage brokers) who then lend to consumers, while retail lenders directly provide loans to consumers. Mortgage brokers, on the other hand, act as intermediaries between borrowers and lenders, but they do not engage in the act of lending themselves.