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].
