2.4 Loan Consultants, Correspondents, or Mortgage Brokers

A. It is common practice for MAP Lenders to use loan consultants, loan correspondents or mortgage brokers to increase origination capacity. A consultant or a correspondent represents the MAP Lender and seeks to identify and screen transactions which the Lender can finance using the MAP program. A mortgage broker represents the Borrower/Sponsor and seeks to identify an appropriate financing source for their loan transaction.

B. The term loan consultant, loan correspondent or mortgage broker, as used here, applies to an individual or outside company who is actively engaged in the mortgage origination business and acts as an intermediary with or on behalf of the MAP Lender but who is not a MAP-approved Lender themselves and is not an employee of a MAP Lender or of an affiliate of the Lender. Under MAP, the consultant’s, correspondent’s, or mortgage broker’s sole role is to refer new business to a MAP Lender including information supplied by the proposed Borrower/Sponsor. Aside from referring a Borrower/Sponsor for a MAP loan, a consultant, correspondent, or mortgage broker may not have any additional role in underwriting the transaction or in respect to the MAP Lender.

C. The consultant’s, correspondent’s or mortgage broker’s fee must be paid solely from the Lender’s fees and must be disclosed in the MAP Lender’s underwriting narrative. The consultant, correspondent or mortgage broker may not have any Identity of Interest with the Borrower/Sponsor or any affiliated entity, and acting as an intermediary with or on behalf of the MAP Lender may not represent any Conflict of Interest with their existing relationship with the Borrower/Sponsor. Consultants, correspondents and mortgage brokers must agree to comply with the MAP Guide’s prohibitions on illegal inducements, kickbacks, and side agreements with the Borrower/Sponsor. For consultants or correspondents to represent a MAP Lender, there must be a signed written agreement acknowledging the requirements and prohibitions of this section and of the MAP Guide and certifying their compliance to the MAP Lender.

D. HUD will only accept application packages from, correspond with or rely on information submitted by an approved MAP Lender, will only communicate with employees of the MAP Lender and will only accept documents signed by authorized signatories of the MAP Lender. MAP Lenders are expected and authorized to hire third party contractors to prepare specialized reports related to any of the technical disciplines, as required by the MAP Guide. However, the involvement of a consultant, correspondent, or mortgage broker in any of these functions, including in the selection of third-party contractors, is not permitted by the MAP program.