What is the financial mechanism where a mortgage broker funds a loan with a lender at closing?

The financial mechanism where a mortgage broker funds a loan with a lender at closing is known as table funding. In this arrangement, the mortgage broker processes the loan and facilitates the closing, but rather than holding the loan on their books, they execute the funding with a lender at the closing table. This enables the broker to provide immediate funding for the borrower while transferring the loan to the lender essentially at the same time.

Table funding is significant for mortgage brokers because it allows them to complete transactions quickly and efficiently without needing to rely on their own funds for loan origination. This process benefits the borrower by expediting the loan process and ensuring that the funds are available at closing.

On the other hand, warehouse lending refers to a line of credit that lenders use to fund loans before they are sold in the secondary market, which is different from the immediate closing process involved in table funding. Mortgage brokering describes the overall service of connecting borrowers with lenders but does not specify the manner in which the loan is funded. Wholesale lending generally involves lenders offering loans to mortgage brokers at a discount, also differing from the direct funding mechanism that table funding represents.