Mortgage Bank Success In Turbulent Times
Foreclosures and credit tightening have rocked the mortgage industry, causing some lenders to go out of business. In this critical time when it’s harder to close the number of loans you’re used to, having relationships with lenders that will be around tomorrow and the next day is important. But how can you tell which ones will close their doors and which ones will stem the tide? This article presents four key signs of a mortgage lender that is more likely to remain strong in these turbulent times. If you do business with lenders who meet these criteria, you’ll be able to spend your time finding and closing loans instead of searching out new lenders.
These four signs of staying power are:
1. Diverse Loan Portfolio.
2. Quickly adapting loan programs to the changing environment.
3. Automated systems that provide economies leading to competitive rates.
4. Technology aligned with the requirements of secondary market investors, leading to better quality loans.
Mortgage lenders create loan programs that meet a variety of borrower financial situations. The more programs they provide, the better opportunity borrowers have of qualifying for a loan that meets their needs. Look for a lender who provides a large portfolio of loan products and has been able to rapidly adapt its loan programs to meet the criteria of secondary market lenders. This is important, because if guidelines aren’t met, then an investor will not buy the loan, resulting in the some lenders having less capital to fund additional loans.
Also look for a lender who uses an automated underwriting system (AUS) that allows for easy modification of loan program guidelines. The AUS will use the programmed guidelines to quickly underwrite loans and help ensure that borrowers qualify. Lenders can better assure that they receive saleable loans when they rapidly adapt their loan programs and utilize an AUS. Having consistently saleable loans will contribute to keeping lenders strong and prices competitive.
Additionally, you should look for the automation of multiple processes and the incorporation of underwriting into the lending workflow. These features reduce costs and increases lender efficiencies, allowing for more competitive rates. Brokers are more likely to use a lender with better rates, so these features add to the lender’s staying power.
If you’re a broker looking for the best wholesale lender, make sure whoever you choose uses the four keys listed above. Doing so means you’ll be able to earn more money in less time.
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