A message from the NAMB 2007 Convention Committee Co-Chairs
National Mortgage Professional
May 02, 2007
So you want to do commercial loan brokering?Anthony M. Gramzaresidential loan brokering, education, mentor
I guess the first question I have to ask myself is, "Where do I
start?" I've been doing residential loan brokering for the past
four years, made a good living at, been able to take those
vacations that I always wanted to take and luckily, I've been able
to save some dollars for those rainy days. As I look out the window
of my office, I am starting to see some of those rainy days coming
- my residential business has slowed down, the phones are not
ringing as much as they used to and I am starting to dip into my
This cannot continue, and I am thinking to myself that maybe I
should consider looking into the fascinating world of commercial
loan brokering. But if I do, where do I start? How do I find the
business? And if I am lucky in obtaining a client and sizeable loan
request, what do I do next? Will I botch the deal? If I gather all
the exhibits, will I find the right lender? Or will I be chasing
lenders all over the countryside? Maybe even worse, will I be known
as a "shotgun broker"?
Will I know how to put a commercial loan package together? Do I
know for sure what the lender will require in the submission? Can I
make the package that appetizing and, once I do, know for sure how
to present it and to whom? Will I know the commercial broker
language in order to market the loan request? Hopefully I will be
able to answer their questions, such as "What is the net operating
income?" "What have you determined as your debt-service coverage
ratio?" and "What cap rate are you using?" These are some mighty
tough questions if you have not been schooled in this phase of our
Are you still interested in moving into the crazy world of
commercial loan brokering? Well, if the answer is yes, then I can
tell you that although the previous paragraphs might have scared
you, it's not all that bad, and from my fellow commercial mortgage
brokers, "Welcome!" Let me share some thoughts on how you can get
started and join the many brokers who are enjoying the financial
rewards together with the satisfaction of helping a client succeed
in their investment goals.
Your first must is education. If you are a member of the National Association of Mortgage
Brokers or the National
Association of Realtors, take advantage of the commercial
courses currently being offered. The majority of these courses, in
most cases, are taught by qualified commercial mortgage brokers and
although they must stay within the required curriculum, many
instructors will share some of their personal and business
experiences. This provides some of the learning straight from the
Next, get associated with an experienced commercial broker and
let that person be your mentor. Learn from him and, if you have to,
co-broker with him. Remember, he will guide you along those first
few rough roads and, if the deal is made, maybe half of your
commission to that mentor is better than none. As you proceed, you
will then need to let people know that you are in commercial loan
brokering. Pass out your business cards, send out flyers to your
other broker contacts, attend real estate and mortgage meetings,
market yourself and, if nothing else, be positive and
Remember - protect yourself. Unfortunately, some people are not
always truthful! If you don't believe that, I can share with you
some real horror stories. Without question, use a mortgage
placement agreement and get it in writing. Without an agreement,
you have no protection and many lenders will not work with you if
you are not the registered broker of record. Most brokers are
willing to share their forms with new brokers, but as I always say,
check further with your own legal counsel, since many states vary
in their rules and regulations.
Take the following words from poet Walter D. Wintle in his poem,
"The Man Who Thinks He Can," to heart:
"If you think you'll lose, you're lost;
For out in the world we find,
Success begins with a fellow's will,
It's all in the state of mind."
Lastly, if you elect to move forward into commercial loan
brokering, welcome aboard. Don't worry about competition - instead,
welcome it. This is a big world; there is more than enough business
for all of us! Whether you do one or a dozen transactions in the
coming year, welcome it, learn from it and cherish your membership
in a group of professionals - commercial loan brokers.
Anthony M. Gramza is president of Rochester, N.Y.-based AMG Commercial
Mortgage Group Inc. and has been in the mortgage banking
industry since 1961. He may be reached at (585) 264 9540 or e-mail
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