Why Non-Delegated Mini Correspondent Lending Works for Brokers

For mortgage brokers looking to grow and take more control of their business, the phrase “Non-Delegated Mini Correspondent (NDC) Lending” might have crossed your radar. If it sounds like a mouthful, don’t worry—we’re here to break it down and explain why so many brokers choose this path.

Whether you’re curious about how NDC lending works or want to understand how it could benefit your brokerage, you’re in the right place. Strategic Compliance Partners (SCP) is here to guide you through the details and help you decide if this step is the right one for your business.

What Is Non-Delegated Mini Correspondent Lending?

At its core, NDC lending allows brokers to gain more control over the loan process by acting as a correspondent lender rather than a broker. The “non-delegated” part means that while you’re still responsible for originating loans and managing client relationships, the underwriting process is handled by the lender.

Here’s why this setup is appealing:

  • Increased Control: You can fund loans under your own name, which can boost your credibility with clients and referral partners.
  • Higher Profit Margins: By taking on a bit more responsibility, you’re rewarded with higher revenue potential compared to traditional broker models.
  • Simplified Risk Management: Since the underwriting decision remains with the lender, you’re not carrying the same level of risk as a fully delegated correspondent.

Why Brokers Are Choosing the NDC Path

The transition to NDC lending offers unique advantages, but it’s not without its challenges. Here’s why many brokers take the plunge:

  1. More Branding Power Funding loans under your own name strengthens your brand and creates a sense of trust and stability for clients. It’s a way to step out from under the umbrella of larger lenders and establish your brokerage as a key player in the market.
  2. Revenue Growth The increased revenue potential is one of the biggest draws. By handling more of the loan process, you’re able to keep a larger share of the profits—a game-changer for growth-oriented brokerages.
  3. Flexibility with Risk Because underwriting remains the lender’s responsibility, you’re able to enjoy the benefits of being a correspondent lender without the significant risks of full delegation.

What You Need to Know Before Making the Move

Obtain an NMLS Number

Switching to NDC lending isn’t a decision to take lightly. Here are a few things to keep in mind:

  • Licensing Requirements: You’ll need to meet specific licensing requirements, which vary by state. This often includes setting up your business as a mortgage banker.
  • Compliance Framework: As an NDC lender, compliance requirements are more extensive than as a broker. Having a solid compliance framework is critical.
  • Operational Changes: Your business will need to adapt to the additional responsibilities of loan funding and closing. This can mean hiring more staff or upgrading your technology.

Pro Tip: Partner with Compliance Experts

Pro Tip: Transitioning to NDC lending doesn’t have to be overwhelming. At SCP, we specialize in helping brokers navigate this path with confidence. From licensing and compliance to operational setup, we’re here to make the process smooth and stress-free.

The Numbers Don’t Lie

File Your Mortgage Call Reports Timely

  • 50% of brokers who switch to NDC lending report significant revenue growth within the first year.
  • 30% of brokers cite compliance challenges as the biggest hurdle in making the transition.
  • The CFPB’s focus on compliance means a solid framework is non-negotiable for NDC lenders.

Ready to Explore NDC Lending?

Why is TRID Important?

If Non-Delegated Mini Correspondent Lending sounds like the next logical step for your brokerage, you don’t have to navigate it alone. Strategic Compliance Partners has the expertise to guide you every step of the way.

Visit our NDC Compliance Services page to learn more, or book a call with us to discuss how we can support your transition. Let’s take your brokerage to the next level—together.

What’s your biggest question about NDC lending? Let us know, and we’ll help you get the answers you need!

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About Ari Karen

Ari Karen is an experienced litigator who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide. Mr. Karen’s practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others.

Mr. Karen speaks regularly on topics affecting all types of lenders including fair lending and disparate impact, LO compensation, marketing service agreements, compliance with social media, non QM lending, vendor management, and much more. Mr. Karen is a principal in the Financial Institutions Regulatory and Labor and Employment practice groups of the Offit Kurman law firm.