As published in Scotsman Guide's Residential Edition, January 2010.
By recognizing the hidden liabilities of weak loan files and the increased costs concealed in servicing portfolios with higher levels of delinquency and default -- and by pricing for this increased risk -- investors have created a quality revolution that has changed the game for mortgage brokers.
Although many brokers used to welcome difficult deals because of the promise of higher paydays, today's market revolves around loan quality and servicing perform- ance. Brokers can best position themselves by developing great service and loan products and by marketing themselves to borrowers with high credit scores and other strong qualifications.
Working with highly qualified clients will be essential for many brokers. To do so, focus on the following elements to improve your business:
Outstanding communication. This includes returning e-mails and telephone calls promptly. Anticipating borrowers' needs and calling them before they feel the need to call you will help establish your credibility.
Fast underwriting turnaround times. Because automated underwriting can no longer be depended upon to provide a guarantee of closing at the point of application, fast, written approvals from underwriters will be critical to serving borrowers and referral sources such as real estate agents.
Fast closings. Owners of vacant homes and bank-owned properties want to close quickly. Cash-out refinance borrowers also prefer to close quickly. Long waits to close should only take place when sellers need time to move out or when buyers need time before they can move in.
To achieve these things, brokers should team with partners that promote the same things. All parties to the transaction -- brokers, lenders, title companies, real estate agents and other service-providers -- must work together to provide better communication and service.
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