Published on December 04, 2018
Written by The Servion Group
Of the various ways financial institutions partner with us, the "wholesale" channel is perhaps the one we get the most questions about. What is it? How does it work?
For most, our other partnership options seem fairly clear. It’s relatively easy to see the problems they solve for our partners, so let's recap them quickly.
Retail partners, for example, are able to add mortgage to their product offering without the cost of production staff and systems. The partner earns a fee for handling a limited number of steps in the mortgage process; we do the rest. They can also offer every major mortgage product – conventional, FHA, VA, USDA, and Jumbo loans – through their partnership with Servion.
Correspondent partners manage more of the process – from taking an application to closing, while Servion handles the underwriting. Correspondent partners earn more from conventional mortgages because of their greater role in loan production. They also can offer every major mortgage product, but they must be approved with the appropriate government agency to close FHA and VA loans.
Now let's try to clear up the other options: wholesale and delegated partnerships. Essentially, these are both options that allow correspondent partners to increase profitability and to further customize their mortgage offering.
By becoming delegated, a correspondent partner also takes on the underwriting and funding of a conventional mortgage. They manage most of the mortgage process. We buy their loans and sell them to the secondary market.
Wholesale was created as an option for correspondent partners that aren’t approved lenders with FHA and VA. We use our approval with the appropriate government agencies to sponsor wholesale partners to originate FHA and VA loans. While the loans still close in our name, the wholesale partners don’t need to manage the agency approval process and they maintain a correspondent-level role in creating the mortgage.
As you can imagine, financial institutions mix and match our partnership options in the way that will be most beneficial for them. Our account executives can guide you to the right fit for your institution.