The clock’s ticking. The client’s freaked. Where’s that approval your lender said would be here by now?!
It’s a situation most MBN readers will be all too familiar with. But when communication breaks down between you and your lender or a deal gets held up, where do you direct the blame? Most experienced brokers know that stalled deals generally start with mistakes on their end that make the job of their lender partners, who could be dealing with a dozen similarly flawed loan packages simultaneously, that much more difficult.
It's not entirely the responsibility of brokers to keep lenders happy, but they should act like it is. A happy lender can push deals through efficiently and quickly and will often make themselves available when brokers are in need of a last-minute miracle. Who wouldn’t want to put a few extra minutes into their deals if it means building that kind of partnership?
A good place to start? Don’t be a dick.
“I’ve heard of some brokers yelling at lenders for not getting something done. I don’t know how that wins you any points,” says Naomi Hamm of Centum Mortgage Choice.
Brokering is stressful, and a lot of that stress needs to be hidden from clients to preserve the fantasy of the frictionless mortgage. But brokers can’t dump that stress onto lenders and expect to them to still be in their corner when they need immediate help.
By simply being polite and courteous to her primary underwriters and BDMs, Hamm says she has a reliable network of partners she can turn out to if a deal appears to be heading for the rocks.
“If I’m in a pinch, I will call them, they will drop everything they’re doing, and they will help me,” she says. “I have had a couple of them do that at times where I was sick with stress because something went sideways. Problem solved.”
iSask Mortgage Brokers’ Chris Kolinski encourages brokers to send lenders a complete client story in case the required documents leave an underwriter with questions that could slow the approval process.
“If I know that story, and I communicate it with the lender, it allows them to underwrite that deal a lot easier and faster. They’re not guessing at anything on the application,” he says.
Kolinski sites the example of a client who missed five credit card payments in a row two years ago, an instant red flag in most lenders’ eyes. He believes most people don’t fall behind in their payments so suddenly and for such a specific duration without a reason, but it’s up to brokers to determine what that reason is and then communicate it clearly to their lenders.
“At the end of the day, it’s not a computer that’s saying ‘approved’ or ‘declined’ when we send an application in,” he says. “It’s an actual person with a heart and a brain that understands that people go through hardships and they shouldn’t necessarily be punished and not get a mortgage because they missed a few payments.”
Vittorio Oliverio of Centum Professional Mortgage Group says there are ways brokers can appeal to a lender’s bottom line. Oliverio spreads his team’s volume amongst a variety of different lenders, including those the brokerage just struck up partnerships with. It gives the lenders an income boost while also giving Oliverio a sense of how they will work together in the future.
“We literally bombard them with deals just to see how they react,” he says.
He also assists lenders in hitting their various funding targets, sending them deals until those targets are reached. In working closely and repeatedly with lenders, he says it’s helpful for brokers to know those lenders’ products inside-out to avoid any time-wasting back and forth.
“A lot of times, we know their products better than they do,” he says.
A bad habit Hamm and Kolinski say brokers need to break is the tendency to send shaky deals to lenders and hope they can turn them into something fundable.
“It’s not, ‘You see if you can get these guys approved somehow,’” says Hamm.
“It wastes so much time,” Kolinski says. “It’s not worth slowing down your lender and making them mad.”
It’s critical (and common sense, really) for brokers to keep in mind that their underwriter partners aren’t twiddling their thumbs waiting for work to land on their desks. They’re busy, and every question they’re forced to ask about a shoddily assembled application only makes their day longer and more frustrating.
“Every time they have to open the file, it takes them 15 minutes to remember what the file’s about. It’s not like they deal with one file a day, right?” says Hamm.
Once brokers realize that they need to hold themselves accountable for the state of their applications, the relationships they have with lenders should be relatively smooth sailing. Get all the docs. Tell the extended version of your client’s story. Remember that everyone screws up now and then. It’s a pretty simple recipe for keeping a lender happy.
“This,” Hamm says, “is my main goal in life.”