Third-Party Mortgage Originator
- Third-Party Mortgage Originator
- 1. A person or company involved in the process of marketing mortgages and gathering borrower information for a mortgage application. This information is then transferred or sold to the actual mortgage lender. Mortgage brokers are third-party originators.
2. A person or company that is involved in any aspect of the mortgage origination process (underwriting, closing, funding, etc.) on behalf of the actual mortgage lender.
Third party mortgage originations frequently come under scrutiny because of third-party originator's lack of an ongoing and lasting responsibility for the mortgage. For example, once a mortgage broker has been compensated for brokering a mortgage, it no longer has any responsibility for the performance of the mortgage, whereas the lender has a continuing interest and is subject to some recourse should the mortgage default. This has lead to some criticism of third-party originators for overpricing or otherwise selling loans to borrowers that they can't afford.
Investment dictionary.
Academic.
2012.
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