Which Mortgage Lenders Will Be Around Tomorrow

The mortgage industry has experienced tumultuous changes causing brokers and lenders to struggle. Some lenders have even disappeared. Since, as a broker, your relationship with lenders is critical to your success, how can you know which mortgage banks will be around tomorrow? Certainly there are many factors that determine success --this article presents four such factors. The lenders that meet this criteria are likely to provide better service to their brokers and remain in business. If you do business with these lenders, you'll be able to spend time finding and closing more loans instead of trying to become approved new lender that just might not be here tomorrow.

These four signs of staying power are:

1. Comprehensive Loan Portfolio.

2. Ability to quickly adapt loan guidelines to the changing environment.

3. Automation that provides economies leading to competitive rates.

4. Technology aligned with the requirements of secondary market investors, leading to better quality loans.

You'll want to find a lender with a large loan portfolio for two reasons. First, the greater the variety of loans offered, the more likely you'll be able to find a loan that meets your borrower's financial situations. Second, with a variety of loan programs, the lender will be safer if some loan programs are discontinued. You'll also want a lender that can rapidly adapt its loan programs to meet the criteria of secondary market lenders. Some lenders sell their loans to investors in order to replenish their available capital. If the loans they fund do not meet investor requirements, the investor will not buy the loans and the lender may become cash strapped.

Besides modifying loan program guidelines, it is important to insert those guidelines into an automated underwriting system (AUS) that can underwrite loans in seconds, which will quickly ensure that borrowers qualify for a specific loan program. Rapid adaptation of loan programs and utilizing an AUS can help ensure that brokers submit saleable loans. This contributes to keeping the lender strong and prices down.

A third factor for success is automating multiple processes and incorporating the underwriting into the lending workflow. That way the lender reduces costs and increases its efficiencies, which allows it to provide competitive rates. Great rates are an incentive for brokers to use that lender and contribute to the lender's strength.

If you're a broker searching for a wholesale lender who will stick around, look for one that exhibits the four signs listed above. Such a lender will help you earn more money in less time.

About the Author

If you're a broker who would like to partner with a mortgage lender that is successfully surviving the market, contact Direct Mortgage Wholesale.