Table Funding
Table funding is a mortgage transaction in which a loan closes in the mortgage broker's name at the closing table, but the actual funds come from a wholesale lender or other third-party direct lender. The loan is simultaneously assigned to the funding lender at closing, making it in effect a pre-arranged sale. Table funding is how most broker-originated transactions are structured and represents a key distinction between broker transactions and true direct lender closings.
In a table-funded transaction, the borrower signs documents naming the broker's company (or the wholesale lender directly) as the lender, while the actual capital comes from the wholesale lender in the background. RESPA (the Real Estate Settlement Procedures Act) specifically addresses table funding at 12 CFR 1024.2, defining it as a settlement at which a loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds — and categorizing it as a secondary market transaction.
From a borrower's experience, table-funded transactions may feel identical to a direct lender closing because you're still signing at a closing table with a loan officer present. However, the accountability structure differs: when problems arise mid-transaction, the broker may not have authority to resolve underwriting issues independently, requiring escalation to the wholesale direct lender. This adds communication layers that a true direct lender closing doesn't have.
Table funding is legal and common; it's how the broker channel facilitates closings without every broker maintaining their own warehouse line of credit. The RESPA concern historically was not the structure itself but whether undisclosed fees were being charged by both the broker and the funding lender at the table. Regulatory scrutiny under Dodd-Frank has made disclosure requirements more robust, though borrowers should still ask: 'Is this loan being funded with your own money, or is it being table-funded by a wholesale lender?' The answer tells you whether you're dealing with a true direct lender or a broker-originated transaction.
Key Takeaway
Table funding is a mortgage transaction in which a loan closes in the mortgage broker's name at the closing table, but the actual funds come from a wholesale lender or other third-party direct lender. The loan is simultaneously assigned to the funding lender at closing, making it in effect a pre-arranged sale. Table funding is how most broker-originated transactions are structured and represents a key distinction between broker transactions and true direct lender closings.
Related Terms
Frequently Asked Questions
No. In table funding, the broker closes the loan at the table but the funds come from a wholesale direct lender in the background. A true direct lender closing means the lender you've been working with the entire time is also the one wiring the funds.
Yes. Table funding is expressly recognized under RESPA and is the standard mechanism for broker-originated closings. The key requirement is that all fees and the assignment arrangement be properly disclosed to the borrower.
Your loan terms at closing are governed by the signed note and deed of trust regardless of whether the loan is table-funded or originated by a direct lender. However, knowing who is ultimately funding your loan helps you understand who to contact if issues arise.
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