The Consumer Financial Protection Bureau is concerned that some mortgage brokers may be shifting to the "mini-correspondent" lender model under the mistaken belief that identifying themselves as such will automatically exempt them from consumer protection rules affecting broker compensation.

Mortgage brokers connect borrowers with lenders who underwrite and fund loans. In contrast, a correspondent lender, as generally understood in the mortgage industry, processes applications, provides legally required disclosures, frequently underwrites the loans, makes the final credit approval decision, funds the loans and sells them to investors.

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