Bayport Funding CEO shares two critical steps to building, or losing, trust with a private lender
For mortgage brokers working in the commercial real estate and private lending space, building strong relationships with both customers and lenders is paramount.
Because of the transaction sizes and deal complexities involved in these sectors, brokers who can build that trust can establish a portfolio of business that sets them up for immense success.
However, all it takes is for that trust to be broken for brokers to find themselves on the outside looking in. One private lending executive noted that there are two key factors that mortgage brokers should consider to maintain a strong trust relationship with lenders.
Marcia Kaufman (pictured top), CEO of Bayport Funding, said overall, the brokers she and her company work with are some of the very best in the industry.
“There are some really high-quality mortgage brokers out there,” Kaufman told Mortgage Professional America. “Phenomenal reputations, and they are the lifeblood of lenders. There are many of them.”
If you want to expand your brokerage into this space, Kaufman offers two essential pieces of advice to follow.
Watch bank statements
Kaufman said the first things brokers need to keep an eye on are the bank statements of customers. Most private lenders don’t allow brokers to send bank statements on behalf of clients. However, that doesn’t mean the broker shouldn’t examine them before sending them to the lender.
“There have been changes that came out with Fannie Mae, which doesn't accept any financials from a broker,” Kaufman said. “It has to come directly from the client. Bayport actually follows suit. We only take bank statements from a client directly. But the brokers should still be diligent in taking a look at that information. Because when it comes in, if we see something, we're going to be saying, ‘Hmmm, they did not vet that information.’”
She noted that a recent example of this occurred when the bank statements were found to be fraudulent. Fraud has been a significant issue, and bank statements are one area where it frequently happens. She said brokers should examine them closely to try to catch fraud before it reaches the lender.
“As a recent example, we had a loan come in,” she said. “It was up to the chief credit officer, and the originator forwarded the bank statements. He noticed that the bank statements were fraudulent. There was a broker involved. We faxed the client and said, ‘By the way, we don't accept statements from the broker. Please send them directly.’ The bank statements were exactly the same from the borrower.
“Brokers have to be really diligent, because it's their reputation on the line. We all want to do business with them, and we want good quality brokers.”
Shopping around
Every mortgage broker is trying to find the best deal for their client. Lenders understand that to a point. Kaufman said if their offers are constantly being used to shop around for better rates and terms, odds are that the broker is going to end up on their bad side.
“The other tip that’s very important to a broker is that their job is to try to find the best deal for their client,” she said. “But if they're going to send me 10 deals, and they're going to shop, and then I don't see a loan out of those 10 deals. If they're going to use my letter of intent to shop to 10 other people, we're not going to want to work with that broker.”
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It comes down to building a partnership between a mortgage broker and a private or commercial lender. Kaufman said if a trust is built there, not only will you have a constant source of funding for your customers, but your customers will also have a better customer service experience. That smooth experience will help you win new business in the commercial sector.
“We want a business partner out there,” Kaufman said. “If you go to a reputable company, like Bayport, or a few of our good colleagues out there, and build a relationship, then the loans that you send in on behalf of your clients will go to the top of the stack. They will get the most attention, will vie for the most competitive offer to them, and the customer service and experience will be better for your client.”
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