What defines a Correspondent Mortgage Lender under New Jersey law?

In New Jersey law, a Correspondent Mortgage Lender is defined as a lender who does not hold or service loans for more than 90 days. This is an essential aspect of the correspondent lender model, as these lenders typically work with larger financial institutions to streamline the loan process. They originate loans, gather documentation, and then sell these loans to a lender or investor shortly after closing, ensuring they do not retain the loan on their books for an extended period.

This arrangement allows correspondent lenders to effectively operate without being classified as traditional mortgage lenders that hold mortgages in their portfolios for the long term. Consequently, the distinguishing feature is the limited timeframe in which they manage the loans, reaffirming their role as intermediaries in the lending process rather than long-term servicers or holders of mortgages.