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.
Here are the four criteria to look for:
1. Diverse Loan Portfolio.
2. Keeps up with guideline changes and changes their own guidelines quickly.
3. Automation that provides 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.
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 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.