Fun and games (and profits too) - Advice for the educated mortgage brokerArt "Ski" Swiatkowski commercial lending, education During the time I served as manager of business development for a small national commercial wholesale lender, I came to realize several things about residential mortgage brokers namely, that most of them were unaware of the great potential that exists with small commercial lending. Residential brokers were either too busy with residential business that commercial lending never crossed their radar screen, or they were so intimidated by the commercial lending mystique that they pretended those deals weren't worth the effort. You might say that small commercial lending was an unintentional industry secret, and those few residential brokers who were aware of this untapped market didn't know how to get started. These conditions are a function of a lack of education, and it is important for residential mortgage brokers to become educated about the benefits of venturing into the commercial arena. They must also discover how to find the right deals and lenders, submit commercial loan packages correctly, and learn how to properly counsel their clients. Based on this line of thinking, InterBay Funding LLC made a strategic decision earlier this year to become an education advocate for the mortgage community. We wanted to wake up residential brokers to the opportunities in small commercial lending. Additionally, we wanted to assist the National Association of Mortgage Brokers in stressing the importance of education as the means to broker survival in the often-turbulent mortgage industry. This initiative gave birth to two very exciting educational tools for brokers. The first is a four-hour accredited course, co-developed with NAMB. The second is a commercial lending board game that's right, a board game. The accredited course titled "Small Commercial Lending for the Residential Mortgage Broker" debuted at the Commercial Symposium held in conjunction with the Illinois Association of Mortgage Brokers 14th Annual Fall Conference and Exhibitor Marketplace at the Pheasant Run Resort in St. Charles, Ill. The course is intended to create a simple starting point for entry into the commercial arena. It is also a primer for the more advanced Commercial I and Commercial II courses that are already part of NAMB's educational curriculum. In addition to explaining the differences between residential and commercial lending, "Small Commercial Lending for the Residential Mortgage Broker" will offer practical information such as how to interview a lender, how to screen prospective borrowers and teach what kind of prospects to look for. The course will also be available to NAMB's state affiliates, for delivery to their membership. Check with your state association to find out when the course will be offered in your area. The board game, which was introduced at the NAMB 2003 Annual Convention and Showcase in Baltimore, is appropriately named "The Small Commercial Real Estate Lending Game." The brainchild of marketing guru Cecilia Flexer, this game is modeled after another very famous real estate board game the begins with an "M." You know the one I'm talking about. If you don't, you should go straight to jail, without passing "Go" and not collecting $200. Thanks in large part to InterBay's Paul Visokey, who painstakingly put together actionable rules for "The Small Commercial Real Estate Lending Game," this game is fully functional and will teach you about originating small commercial and income-producing property deals through real transaction scenarios. If you want a fun way to find out about this growing segment of the mortgage business, then this is it. In fact, some mortgage brokers have started using the game to teach their loan officers about small commercial deals. To obtain a copy of the game, log on to www.namb.org and click on the "Education" and "Products" links. As interest rates begin to rise, the pool of potential borrowers will begin to shrink. This will certainly affect broker income levels. In fact, if this contraction is severe enough, some brokers and loan officers will not survive, which can be attributed to a lack of knowledge. It is unfortunate that more mortgage brokers don't take a proactive approach to their own education and that of their employees, especially when education can have a positive impact on loan production. Whether learning new sales and marketing techniques, how to work new market segments or how to use new products, applied knowledge can often mean the difference between success and failure. The "Small Commercial Lending for Residential Brokers" course and "The Small Commercial Real Estate Lending Game" are just two of the many educational tools available to the broker community. But the individual broker or loan officer must first make a personal commitment to their education, in order for these tools to be useful. I sincerely hope that those of you who are reading this article make that commitment. Explore your options and make a plan that will help to keep you in the money, and then take action. This is the key to making success happen. Art "Ski" Swiatkowski is director of training of InterBay Funding LLC. He may be reached by phone at (215) 283-4520 or by e-mail at [email protected].