A new paper by Essex Mortgage’s correspondent division analyzes the impact the COVID pandemic had on correspondent lenders. The paper points to significant negative impacts related to liquidity and increased lending risk that the COVID health crisis brought to correspondents in March of 2020.
These negative impacts were more severe for these lenders than for brokers or direct lenders because the loans had already been closed in the correspondent’s name when the crisis pushed aggregators out of the market.
“Correspondent lenders suddenly found themselves in a very uncomfortable position and with no good source of liquidity,” said Jonathan Grafflin, correspondent channel executive at Essex Mortgage and the paper’s co-author. “In light of everything that has happened over the past year, Correspondent lenders have a much better idea of exactly what they need in an aggregator.”
Grafflin pointed out that new variants of COVID and spiking infection rates around the country are renewing concerns for correspondent clients and prospective clients.