Third-Party Mortgage Originator


DEFINITION of '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.

BREAKING DOWN 'Third-Party Mortgage Originator'

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.

  1. Third Party

    An individual or entity that is involved in a transaction but ...
  2. Third-Party Transaction

    A third-party transaction is a business deal involving a buyer, ...
  3. Origination

    The process of creating a home loan or mortgage. During the origination ...
  4. Mortgage Broker

    An intermediary who brings mortgage borrowers and mortgage lenders ...
  5. Mortgage Pipeline

    Mortgage loans that have been locked in with a mortgage originator ...
  6. Mortgage Originator

    An institution or individual that works with a borrower to complete ...
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