Wholesale Lending
The channel through which lenders fund loans originated by independent mortgage brokers rather than their own retail loan officers.
In a wholesale relationship, a mortgage broker submits a borrower's application to a wholesale lender, who underwrites and funds the loan. The broker handles the borrower-facing relationship; the wholesale lender handles the actual lending.
Wholesale pricing is often more competitive than retail because the wholesale lender doesn't carry the cost of running its own loan officer network. The broker captures some of that savings as their compensation, and some flows through to the borrower as a better rate or lower fees.
Different wholesale lenders specialize in different product niches, jumbo, non-QM, government, first-time buyer programs. A good broker maintains relationships with multiple wholesale partners so they can route each loan to the lender most likely to approve it on the best terms.
Related terms
Other terms you'll see alongside Wholesale Lending
A licensed professional who shops a borrower's loan application across multiple wholesale lenders rather than originating directly.
A lender that originates loans directly to borrowers through its own loan officers, branches, and call centers.
The licensed individual who takes a borrower's loan application and represents them through the mortgage process.
A mortgage that doesn't meet the Qualified Mortgage standards set by federal regulation, often used for self-employed borrowers or non-standard income.
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