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From the appraiser's perspective - Smart lenders profit from quality borrowers and happy appraisers

Jul 05, 2005

Selecting a lending partnerGeorge S. PhelpsLending partner, Account executive, Turnaround time You would think that choosing a lending partner would be simple and straightforward. And it can be, if you obtain the necessary facts upfront. The problem is that many lenders offer enticements to draw you in, but after you've been down the road with them, you discover their faults. Unfortunately, by then you have an established pipeline with the lender and you wish you didn't. The Starting Line: Your Account Executive Your first contact with a potential lender is generally with the account executive. It is important to establish that this person is not only knowledgeable, but believes that delivering service and establishing a long-term relationship are top priorities. Lenders often have personable and extremely potent salespeople as account executives, but in reality, they are just glorified doughnut peddlers. If being entertained and well fed is your goal, you don't have to read any further. Walt Werchanowskyj of U.S. Residential Mortgage in Atlanta values an account executive who is professional and knowledgeable. "This person is an extension of us. They don't have to know all the answers; they just have to be responsive and get the answers," he said. "I don't care about doughnuts and I don't have to see their faces; I just want someone who can find ways within the guidelines to make the deals work." Access to the Decision-Makers "Can I have direct access to senior management (the decision-makers)?" This is a good question to ask when you are interviewing an account executive. For a true partnership to take place, you as a customer need to have access to the most talented, decision-making personnel. You won't want to abuse this access, but it's great to know you have it when you need help completing a deal. Price Does Not Equal Quality While the best price is always an attention-getter, if you can't get the loan closed, that best price doesn't do you much good. So, don't let price be your sole determinant in selecting a lender. The low-priced lender may have foregone a knowledgeable, service-minded staff, using pricing as the only component to obtain business. They will initially get business, but when the lender can't get the loans turned around and closed, they will ultimately lose the business. "I can sell 'yes,' but no matter how low your rate is, I can't sell 'no,'" said Phillip Maddox of Gulf Shores Mortgage in Gulf Shores, Ala. He explained that if he couldn't get a good turnaround and a week passed, he would lose the deal to someone else. It is a risk he does not like to take with his clients. "My borrowers want instant gratification and to get an answer quickly without a lot of paperwork," he said. True Turnaround Time To get an accurate answer, ask what the current turnaround time is for underwriting and closing loans. Also, ask what the turnaround was when volume was at its peak. If there is quite a disparity, then the lender is not very good at managing their workflow. No one benefits when a lender takes all the business they can get, but can't bring it to the table. You need to select a lender who keeps control of their volume while maintaining a high service standard at all times. Leaving Your Competition Behind Having a full line of products is another critical factor when selecting a lender partner. Do they offer you products that will increase your competitiveness? For example, a "Lock and List" program that allows real estate agents to lock in rates on listed properties before they have homebuyers. The real estate agent gains an edge over rising rates and the broker gains the trust of the agent. The lender should also have an innovative, forward-thinking management team. If you are not seeing evidence of this in their product offerings, then expect very bland products. In addition, lenders should be capable of updating rates several times a day depending on market conditions, and then pricing and offering products accordingly. Don Williams of Covenant Mortgage in Trussville, Ala. says innovative products have expanded his ability to serve more types of people. "The new types of loan programs coming out continue to expand the market and have helped more people to buy homes," he said. "Having a variety of products is a huge strength." Key Questions to Ask About Your Potential Lender When looking for your next lending partner, be sure to ask the following key questions and you'll be much happier down the road. After all, you are only as good as the lender standing behind you. 1. How knowledgeable is my prospective account executive? Are they interested in building a long-term relationship with me? 2. Will I have direct access to the decision-makers? 3. Does this lender price low to attract customers while cutting back on service? Can they provide the turnaround time I need? 4. Can they deliver a rapid turnaround when experiencing high loan volume? 5. Does this lender offer innovative products? How quickly can they react to market forces? George S. Phelps is chief operating officer of Atlanta-based Primary Capital Mortgage. He may be reached at (770) 226-8181 or e-mail [email protected].
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