Third-Party Origination

A third-party origination is a transaction wherein the lender enlists the help of another party in order to complete the mortgage. In these transactions, the mortgage lender allows a third party to originate either all or part of a mortgage loan. This might be done for any number of reasons, though it is usually done when the lender does not have the resources to handle the entire process on his or her own. The lender might have a third party handle the application process, the loan marketing or even the closing procedures; some smaller lenders will make a habit of doing this. The most common third party to enter into the process is a mortgage broker. These are individuals or companies who attract borrowers through creative marketing. Once they have matched the borrower with the right loan, they pass off the process to a lender who can finish the loan process.