A new correspondent lending business at Quicken Loans Inc. is targeting small financial institutions.
The Detroit-based company announced that its Quicken Loans Mortgage Services division has opened up a correspondent lending platform for community banks and credit unions.
Clients of the new channel will be able to close and fund mortgages in their own names.
Quicken programs include conforming and government mortgages. A spokeswoman said requirements to become approved as a Quicken correspondent “will very closely mirror what is currently in place from FHA.”
Last year, Quicken originally said that the Charlotte, N.C.-based mortgage services business would offer fulfillment services to community banks and credit unions. The expansion appears to be an extension of that move.
The new channel appears to be an affinity-correspondent hybrid — with the financial institution starting the mortgage application, maintaining contact with the prospective borrower and closing the loan at the bank or credit union.
For its part, Quicken says the correspondent operation provides the support and services needed to close the loan and get it sold to Quicken Loans.
The move into third-party originations by one-year-old Quicken Loan Mortgage Services is an about-face for Quicken, which had previously been adamant about proclaiming its retail-only status.
But Tod Highfield, a divisional vice president for the mortgage services business, called the expansion logical, noting that clients can take advantage of their own local presence while gaining access to Quicken programs.
“With increased rules determining who can originate mortgages, many banks and credit unions have found themselves with a desire to offer home loans, but not a large enough need to justify the cost of hiring a large staff of mortgage consultants and underwriters,” Highfield explained in the statement.
The executive’s comments seem to highlight a federal requirement that originators at non-bank lenders be licensed despite that loan officers at banks and credit unions don’t need a license. Other firms have been actively following this strategy to tap top-producing originators for multi-state originations who would otherwise need multi-state licensing at non-bank lenders.