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   ARTICLE   |   From Scotsman Guide Residential Edition   |   February 2007

You and Your Lender, Hand in Hand

Brokers and lenders can work together by focusing on the three elements of successful partnership

The broker-lender relation-ship historically has been typified best by the phrase “can’t live with them, can’t live without them.”

Brokers need lenders to get loans to their customers. But they often encounter frustrations with inaccurate prequalifications, unknowledgeable account representatives, sluggish or unreliable turnaround times and an overall feeling of being lost in the crowd.

Lenders, of course, require brokers to bridge the gap between their products and the borrowers who need them. They encounter frustrations as they attempt to offer consistent processes in an industry that, on the whole, has not done a remarkable job at maintaining any kind of common language.

The secret to success, however, can be summed up by a single word: Partnership.

Basically, a partner is someone who takes part in some activity in common with another. But there are good and bad partnerships. After all, simply sharing an activity by no means guarantees completing that activity successfully or generating positive results.

Successful partnerships, whether business or social, are primarily made up of three elements: 1. trust; 2. direct communication; and 3. mutual benefit.

If any one of these elements is missing, the partnership will not be successful. One party will have an unequal stake and ultimately will transform the union from that of partner to vendor.


One of the greatest pitfalls of the business relationship is when one party overpromises and underdelivers, setting them up for a relationship based in doubt.

Brokers must know that a lender will deliver upon the loan they need for their borrowers. Their reputation is on the line when they make promises based on the assumption that the lender accurately estimated rates and closing time.

A lender can do a lot to ensure this accuracy is consistent, from investing in technology solutions such as automated-underwriting and decisioning engines to delivering training and educational resources that brokers can easily navigate to best use those tools. The lender must approach loans with a “broker-centric” mentality.

On the flip side, a lender should be able to trust that brokers will present accurate information about their borrowers. Although some changes are to be expected, as people often won’t have exact numbers to cite off the top of their head when completing a short application, ballpark estimates should be as close as possible. There is a big difference between gross monthly income of $5,000 with no child support and an income of $3,000 and $400 in monthly child support, for example.

Addressing the importance of this accuracy on the front end of the conversation with borrowers can do a lot to prevent misrepresentations down the line.

And there are tools that brokers can look for in a lender that will help this process. If, for example, the lender’s technological muscle lets it deliver accurate, reliable loan decisions, brokers shouldn’t be shy about asking if the lender can provide an online application to send directly to the borrower. This would not only ensure that the information is interpreted accurately, but it also would deliver it in the format the lender needs.

Direct communication

A good partnership develops when two parties are able to understand not only the words that the other person says but also the meaning of those words.

When brokers need a service or tool from their lender, they need to spell it out. And a lender must make itself available for hearing those requests.

In all its correspondence, the lender should provide a place for brokers to respond. There should be a feedback area on the lender’s Web site and an overall sense that the lender is concerned about what brokers think and need. After all, we’re all trying to achieve the same goal, and that is simply to close more loans.

Mutual benefit

Let’s be honest: If brokers had hundreds of millions of dollars of their own money to lend out as a private banker, they might just ditch the lender all together. And if nearly 70 percent of loan originations weren’t done through broker channels, the lender might forgo the wholesale relationship entirely.

And some brokers have indeed become bankers, just as some lenders have added direct-to-consumer elements.

But even with these additions and changes, no single banker can flex the underwriting muscle of a large lender. And no lender can reach the kind of relationships that brokers can elicit with their borrowers.

So instead of thinking that they are stuck with each other, brokers and lenders must recognize that they have a common goal and work toward it.

The brunt of the load for this part of the relationship rightfully sits with the lender, which continually needs to offer its brokers tools they can use efficiently, from technological tools to marketing materials. But brokers, too, must look for those lenders that can offer this “above and beyond” service and start streamlining their processes so that they can put the bulk of the heavy lifting on the doorstep of the partner with the most resources.

Getting to partnership

When working with new lenders, brokers should ask them what services they provide. They should look for not only today’s rates but also today’s tools — and tomorrow’s and the next day’s.

A solid relationship based on multiple points of compatibility and mutual benefit will drive down brokers’ costs and free their time to pursue new borrowers. And if those brokers can devote more time to their business because of a particular lender, then that lender benefits by closing a larger proportion of their loans.


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