One of the common factors contributing to the demise of so many wholesale operations during the past several years was the propensity to overreach and to grow into markets unknown to the wholesaler's underwriters and staff. Contrary to popular belief, what you don't know can hurt you -- in fact, it can hurt you the worst.

In the wholesale business, lenders that overreach often end up unable to manage the risk in their portfolios carefully. Appropriate risk management has always been important, and it's even more imperative during times of struggle, such as those the mortgage industry continues to experience.

As you evaluate lenders' risk management, ask yourself if they focus on markets they know well. Lenders that do this often passively manage their loan portfolios by virtue of their extensive market knowledge and associated risk factors. Combined with business savvy and self-awareness -- knowing what they do well and sticking with it -- passive risk management can help stop overreaching before it starts.

Finally, lenders also should know where to find untapped growth potential in the market and not be afraid to move when the situation is right. The best lenders will treat you with respect, keep you in the loop at all times and know when a loan is worth the risk and when to say no.

Charles Wagner is a senior vice president and co-leader of CBC National Bank's wholesale-mortgage division. Based in Atlanta, the division began operations in September 2007 and reached the $1 billion milestone in loan production in June 2009. Reach Wagner at cwagner@cbcnationalbank.com.

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