The Strange Case 

of the Shrinking Mini-Correspondent: 

A Primer on Forensics



Article - Excerpts
Mini-Correspondent Wave
Bureau Steps In







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You may be interested in the White Paper we are publishing today, entitled:Back

The strange case of the shrinking mini-correspondent has been taking its course, gradually and inexorably, through the annals of mortgage banking to its current resting place on July 11, 2014, with the bloviatingly long title "Policy Guidance on Supervisory and Enforcement Considerations Relevant to Mortgage Brokers Transitioning to Mini-Correspondent Lenders."
Published by the Consumer Financial Protection Bureau, the issuance is on its way to all supervised institutions as a Policy Guidance relating to the Bureau's exercise of its authority to supervise and enforce compliance with RESPA and Regulation X and TILA and Regulation Z in certain transactions involving "mini-correspondent lenders".
In this White Paper, I explore the far-reaching implications of the CFPB's Policy Guidance on mini-correspondents.
President and Managing Director 
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The billowing wave of the mini-correspondent began as a trickle, intensified as lenders established "mini-correspondent channels," and gushed into a modest torrent, its demand rising in prominence on January 10, 2014. For it was on this date that the proximate cause for the new mini-correspondent channel was given its impetus, due to the Final Rule pertaining to the Ability-to-Repay guidelines and the requirements of the Qualified Mortgage rule


Due to the Bureau becoming aware of the transitioning of mortgage brokers from their traditional roles to mini-correspondent lender roles, the CFPB has become concerned that some mortgage brokers may be shifting to the mini-correspondent model in the belief that, by identifying themselves as "mini-correspondent lenders," they automatically alter the application of important consumer protections that apply to transactions involving mortgage brokers. 


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LENDERS COMPLIANCE GROUP OF COMPANIES are the first full-service, mortgage risk management firms in the United States specializing exclusively in outsourced mortgage compliance and offering a full suite of services in residential mortgage banking for banks and non-banks. We are pioneers in outsourcing solutions for residential mortgage compliance. We offer our clients real-world, practical solutions to mortgage compliance issues, with an emphasis focused on operational assessment and improvement, benchmarking methodologies, Best Practices, regulatory compliance, and mortgage risk management.
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