Understanding Mortgage Lending Channels
Direct Lending, Correspondent Lending, Table Funding, and White Label Solutions
By Jennifer Cabrera | CEO, Atlantic Union | Founder, New Century Mortgages LLC
When you're shopping for a mortgage or considering becoming a mortgage broker, understanding how loans actually get funded can make a significant difference in your experience, your rates, and your opportunities. Not all lenders operate the same way, and the lending channel a company uses directly impacts everything from approval speed to pricing flexibility.
In this guide, we’ll break down the four primary mortgage lending models: direct lending (also known as balance sheet or retail lending), correspondent lending, table funding, and white label solutions. Whether you're a borrower seeking the best financing or a broker evaluating partnership opportunities, this knowledge will help you make smarter decisions.
What Is Direct Lending (Balance Sheet Lending / Retail Lending)?
Direct lending, often called balance sheet lending or retail lending, represents the most straightforward lending model. In this structure, the lender uses its own capital to fund loans. The loan remains on the lender’s balance sheet, meaning they retain full ownership and responsibility for the loan’s performance.
How Direct Lending Works
When you borrow from a direct lender, you're working with a company that has its own pool of money to lend. They underwrite your loan using internal guidelines, fund it with their own capital, and typically service the loan themselves. This creates a streamlined experience where one company handles everything from application to monthly payment collection.
Advantages of Direct Lending
- Faster Decision Making — Direct lenders don’t need secondary investor approval, allowing quicker approvals and funding.
- Flexible Underwriting — More latitude to consider compensating factors such as assets or employment history.
- Relationship-Based Lending — Greater focus on long-term borrower relationships and personalized service.
Who Benefits Most from Direct Lending?
Direct lending works well for investment properties, DSCR loans, bridge loans, and borrowers who fall outside conventional agency guidelines. New Century Mortgages leverages direct lending relationships to offer competitive non-QM options often unavailable elsewhere.
Understanding Correspondent Lending
Correspondent lending is a hybrid model where a lender originates and funds loans using its own capital with the intention of selling them to a larger investor shortly after closing.
The Correspondent Lending Process
The correspondent underwrites and closes loans in its own name using a warehouse line or internal capital. The loan is then sold to a larger institution such as a bank or GSE. While the investor sets guidelines, the correspondent manages all borrower-facing interactions.
Impact on Borrowers
Borrowers gain access to competitive conventional, FHA, VA, and jumbo loans. Rates often mirror those from large banks, though loan servicing may transfer after closing.
What Is Table Funding?
Table funding occurs when a loan closes in the originator’s name, but the funds come from a third-party source at the closing table. From the borrower’s perspective, the originator appears to be the lender.
Key Characteristics
- Funds are provided at closing by a third party
- Originator branding appears on all documents
- Regulated under RESPA with required disclosures
Table funding allows brokers to build brand recognition while delivering a seamless, single point-of-contact experience for borrowers.
White Label Lending Explained
White label lending enables a company to offer mortgage products under its own brand while relying on another institution for underwriting, compliance, technology, and funding.
Who Uses White Label Solutions?
- Real estate brokerages
- Financial advisors and wealth management firms
- Credit unions and community banks
Advantages of White Label Partnerships
- Rapid Market Entry
- Brand Consistency
- Scalable Growth
Choosing the Right Lending Channel
For Borrowers
Borrowers seeking flexibility and speed may prefer direct lenders, while conventional borrowers may benefit from correspondent lending. Table-funded and white label options offer strong personal relationships through trusted local professionals.
For Mortgage Professionals
Each model offers different advantages depending on capital, control, and growth objectives. From full balance sheet lending to turnkey white label platforms, the right choice depends on business strategy.
Partner with New Century Mortgages
New Century Mortgages delivers AI-powered, tech-enabled lending solutions designed to improve speed, transparency, and efficiency. Our expertise in DSCR, bridge, and non-QM financing allows us to close deals others cannot.
Ready to experience faster, smarter lending? Contact New Century Mortgages today.
