Santa Barbara - How to select a mortgage lender?

A client in Santa Barbara asked me the other day, "What's a correspondent lender and why is it important?"

There are significant differences between the various types of lenders. Here was my answer:

A correspondent lender is somewhere between a direct lender (better underwriting) and a broker (shop for rates). They are becoming more common in the industry. Yes, Community West Bank is a correspondent lender! See below for more insight!

At my bank, our underwriters (in Goleta) have signing authority for 6 different major institutions (i.e., BofA, Chase, etc.). Also, we fund these mortgages with our bank’s money. Approximately 10 days after the closing, they are “purchased” by one of these institutions. VERY similar to a “direct lender” but we have 6 different underwriting guidelines to pick from. With all of those different programs, there usually is a way to get an approval.

Now regarding the “shopping” for the best rate…. Daily, we look at our various “lending partners” and see which of them has the best rate. The nice part is that we don’t really care which lender. We just the consumer to get the best rate.

There you have it! When a consumer says, “I want to go with someone out-of-town because they can shop the rate. You have a solution for them so the file can stay with a local lender!”

Ken Doss
Community West Bank
Santa Barbara, CA
805/692-4382