Brokers should consider eight questions when deciding whether to join a larger company

Gary Willis, CEO, iServe Residential Lending LLC

As published in Scotsman Guide's Residential Edition, March 2010.

As mortgage brokers struggle to comply with new and more-stringent regulations and requirements, many question whether their business can withstand the significant financial and administrative burdens these new rules create. It's no longer a question of competitiveness against peers but rather a question of survival. In light of these changes, brokers increasingly find themselves taking a step back, assessing the outlook for their business and posing an important question: Should I remain independent?

Mortgage brokers considering strategic partnerships with larger organizations should pose the following eight questions when evaluating their alternatives:

1. How important is it to retain complete independence? If it's not critical, then finding a larger company to align with is a viable option. If maintaining absolute autonomy is important, however, then joining a larger organization may not be the right thing.

2. Can the prospective organization provide adequate access to capital that will allow me to grow my business? Find out if the company has the resources to meet net-worth requirements and the ability to maintain and increase its warehouse facilities and investor relations.

3. Can the company underwrite Federal Housing Administration (FHA) loans? Picking a company that allows you to originate FHA loans may be critical to your ability to serve your community.

4. What's the breadth of the company's platform? Companies that offer the convenience of working with a single, integrated team that can deliver the full spectrum of lending, refinancing and servicing present attractive business opportunities to independent brokers.

5. Can the company's infrastructure ease my business's administrative burden? Piggybacking on a larger company's umbrella of administrative support can decrease overhead expenses and let you focus on growing your business and originating loans. Find out if the company offers a full range of employee benefits, including medical insurance and retirement plans. Often, companies can receive discounted medical and dental packages, which can remove an additional financial restraint on you or your business.

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