Correspondent lending regains momentum

But FHA/VA correspondent production is still far from pre-pandemic levels

Correspondent lending regains momentum

Correspondent lending picked up momentum in the fourth quarter of 2020, Inside Mortgage Finance reported Monday.

Correspondent production of FHA and VA loans was up 7.6% quarter over quarter, according to an Inside FHA/VA Lending analysis. In comparison, a group of 40 lenders surveyed posted only a 2.7% quarterly gain in their total government-insured lending during Q4 2020.

Read more: CA-based wholesale mortgage servicer enters correspondent lending space

Overall, the correspondent share of new FHA and VA lending increased was 32.5% last year – below the 41.8% share in 2019 and the record 57.8% in 2015.

The volume of government business in the correspondent channel only saw a 6% increase in 2020, while its total FHA and VA lending experienced a 38.4% rise.