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Titan Lenders Corp. has been founded on the principle that mortgage lenders should
aggressively focus on their front-end profit generator – origination, rather than attempt Our outsource fulfillment and mortgage consulting services include: We won’t sacrifice Quality for Volume - EVER. Contact us to learn more |
Domestic Outsourcing for the Mortgage Industry
Broker to Banker |
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NEW WEBINAR! How to Make the Broker to Banker Transition Attention all Community Bankers and Credit Unions - Start your year off right by attending one of Titan Lenders Corp.'s educational Broker to Banker Webinar! We have launched a webinar series specific to community banks and credit unions considering the advantages of transitioning from mortgage lending as a broker to mortgage banker. The webinars take place bi-monthly on Tuesdays. Sign up here for our next session! "There truly has never been a more ideal time for community banks and credit unions to improve their balance sheets and competitive position by becoming mortgage bankers." - Bill Null, Titan Lenders Corp. Director of Business Development Broker to Banker Transition Challenges Transitioning from "broker to banker" has always had an allure for those prepared to contend with added responsibilities, risks, and resource requirements. Tightening restrictions on brokers’ eligibility for opportunities to earn a profit and the massive exit of viable wholesale investors from the market has created an environment in which the move from “broker to banker” has become increasingly more attractive and possibly a necessity rather than a choice. For many, the uncertainty of not being able to provide viable loan products with any means of profitability fuels risks for brokers that counterweigh the risks of becoming a banker. It is a natural, and perhaps advisable, progression for mortgage professionals with confidence in their mastery of key processes and concepts, and a knack for the often-underestimated art of relationships. A Successful Broker to Banker Transition Those mortgage lenders who intend to stay in the game by making the transition to banker should immediately assess both their confidence in being able to manage all stages of the lending process and their ability to secure relationships with warehouse lenders and correspondent investors. They should consider the time and resources involved in building an organization that not simply originates like a well-oiled machine, but is also equipped and qualified to manage operations which includes: underwriting, loan document preparation, closing, funding, and post closing (shipping/delivery of the credit file, collateral file, govt insuring package, trailing document follow-up, meeting QC requirements). Managing these processes with confidence and establishing profitable business-to-business relationships are two sides of the same broker to banker equation. Aspiring bankers will be more likely to secure the required relationships when they can demonstrate their competence with key processes. As a by-product of its relationship with one or more warehouse lenders, a transitioning broker is compelled to follow a specific playbook with regard to its lender partners and operating practices. Add to that playbook a complex network of investor and regulatory compliance requirements and it is clear why operational shortcomings can doom a new banker. Titan's Role in Broker to Banker Increasingly, broker-to-bankers are looking to accelerate their transition by working with outsourced services providers recommended by their target partners. Further, broker-to-banker candidates seeking to reduce risk, errors and overhead in their mortgage operations, while remaining responsive to fluctuations in their loan closing pipeline, view back office and fulfillment outsourcing as a variable cost solution alternative to hiring and managing a fulfillment staff: closer, post-closer and funder in which they have no practical experience to manage. Broker-to-banker aspirants should ask themselves how they plan to conduct fraud checks on individual borrowers and properties prior to underwriting, or at the very least before closing, as part of an internal due diligence process. They should also think seriously about their ability not merely to conduct compliance checks, but to anticipate investor preferences for which tools are used. Broker-to-bankers must also manage and anticipate the impact of relationships within the state where they are licensed to lend. A good example is in conducting business in “Escrow/Dry” states vs “Wet/Closing” states, not to mention special considerations for “Attorney” states. Broker-to-bankers run the risk of entering the lending arena in these states with little or no working knowledge of the subtle differences in standard business practices within the individual states. Unless broker-to-bankers are interested in managing the kind of operational detailed required by a complex process fraught with risk, they should find an expert outsource partner to do the work. Industry respected back office and fulfillment outsource providers such as Titan ensure new mortgage bankers the best possible entre in their time of transition and create a foundation that will support continued growth and success.
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