Underwriters are busy and spend their days sifting through myriad files, many of which are headache-inducing, but when they stumble across files submitted by mortgage brokers they know are diligent, those files are dealt with expeditiously.
According to Ameera Ameerullah, CEO of Canada Mortgage and Financial Group, brokers should know their clients and their files inside and out before submitting them.
“Have a full package with documentation of the client so that there won’t be any conflict of information from the time you submit your application to a lender versus when you get the information from the client. It will help you be transparent,” she said. “You need income documents up front and recent pay stubs because when client says they’re making $60,000 a year, for example, that’s the total number. To see the breakdown, you need the pay stubs.”
She added that transparency nurtures trust.
“Tell the lender the challenges of the deal. When you review the credit report and you notice any delinquency or any past bankruptcy, any late payments, you need to put it in your summary notes.
You also want to discuss the merits of the deal, the strengths of the deal, what the good points are, and you want to be honest and transparent.”
Nary an underwriter is the least bit chuffed to learn brokers have concurrently submitted the same deal to different lenders.
“Don’t shop the deal around,” said Ameerullah. “When you send the deal out to the lender, don’t send it to three different lenders as well. Lenders do talk and it’s a credibility issue. If you want to establish rapport with a lender, just deal with one lender at a time when you submit that file.”
“Reputation carries forward and lenders talk,” added private lender Wasah Malik of King Lending Capital. “The whole industry knows who the bad brokers are. Fortunately, it doesn’t happen too often, because there are more very good brokers compared to a few bad ones. And it’s bad because the borrower suffers at the end of the day.”
Ameerullah and Malik both emphasized how invaluable high funding ratios are, with the latter—a former broker—stating:
“Every lender, every bank, every institution looks at brokers’ funding ratios. When I was brokering deals to banks, my funding ratios were very, very high. That allows you to have a better relationship with lenders because you get the job done, and that’s what lenders are looking for.”
Knowing lenders’ product suites is another way to both secure expeditious funding and build strong relationships. It’s also how brokers can get their clients to agree on rates before contacting lenders.
“Every lender has different products,” said Malik. “As a broker, you should get acquainted with which products are offered by which lenders, so you know where to go and who offers what products. When brokers don’t know, they arbitrarily make different calls to different lenders and it wastes two, three days. It’s your job to know which products they offer.”
Lastly, brokers should always be respectful to their lenders, and that includes understanding the importance of their service level agreements.
“You also have to respect their SLAs, their turnaround time,” said Ameerullah. “When you submit a file to a lender, you don’t want to call the underwriter two hours later. You want to give them the time based on what their SLA is. For some it’s 24 hours, some 48 hours—you want to respect that. By doing that you’ll be able to gain the lender’s confidence in you, the lender’s trust in you, and they’ll know the quality of your deals and that you’re transparent, and that you’re doing a lot of the background work for them.”