A Correspondent lender is a lender or an institution which has the capacity to authorize loans on behalf of a mortgage lender who delivers loans to another (usual­ly larger) lender against prior price commitments the larger lender has made to the correspondent.

Mortgage brokers sometimes evolve into correspondent lenders when they accumulate enough capital to acquire the credit lines needed to close loans in their own names.

The correspondent lender differs from mortgage brokers and other lenders in that they tend to individually sell the mortgages which they arrange as opposed to grouping them with other mortgages for resale. But correspondents continue to depend on commitments from other lenders to protect them against the risk that market prices will decline while they are holding loans.

The correspondent lender may also service the loan for the lender.