Scotsman Guide - October 2010 Residential Edition

» post your loan: scotsmanguide.com/loanpost » search matrix: scotsmanguide.com/warehouse

COMPANY NAME

1 Size of line: Minimum

2 Size of line: Maximum

3 Personal/corporate/combined net worth requirement: Minimum
4 Annual origination volume: Minimum
5 Willing to train those new to warehouse lending
PROGRAM INFO
Gateway Bank FSB
888-210-0002 x4257
www.gatewayfsb.com

6 Flow

7 Bulk

8 Lien position: 1st
9 Lien position: 2nd
PRODUCTS
10 Construction
11 FHA / VA

Min

1
Max
2
Min
3
Min
4 5 6 7 8 9 10 11 12 13 14 15 16
PROGRAM INFO
PRODUCTS

12 Fannie Mae / Freddie Mac

13 HLTV programs

16 Jumbo residential
17 Mixed-use properties
18 Nonprime

11

2M 30M NA/1M/NA 120M Y Y Y Y Y Y Y
Nation's top warehouse bank (Federal Savings Bank), Quick$ale®, off balance sheet (purchase facility), early wires, TPOs

14 Home equity

15 Home improvement

CONTACT
17 18
Tell lenders you found them in Scotsman Guide
Scotsman Guide makes every attempt to ensure the quality of matrix and directory information, which all listed lenders verify or update monthly. Because of the production cycle and dynamic nature of the industry, loan product
terms and availability may not reflect the latest changes. Please contact lenders directly for the most-recent program details. If you believe data is inaccurate or misrepresented, please e-mail: matrixfeedback@scotsmanguide.com.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Contact
Ed McGrath
ed.mcgrath@gatewayfsb.com
NATIONWIDE

« tools and tips »

By David Colwell Executive vice president Loan-Score Decisioning Systems

Position Yourself as a Premium Broker
Understanding lenders’ broker-evaluation criteria may improve your pricing and your profit

Today’s wholesale lenders are more sophisticated in the evalu- ation methodologies they use to segment and identify premium mortgage brokers. Margin compression in the industry requires lenders to look at every aspect of their broker relationships to originate profitable business.

In the past, lenders typically evaluated brokers on only two criteria: volume and pull-through. Most of the larger lenders today, however, segment brokers based on volume, profitability, quality and growth potential.

Understanding and preparing for the factors that go into each of these components is critical for mortgage brokers who want to work proactively with lenders so that they gain pricing and service incentives.

Lenders’ criteria

Lenders use a number of criteria to evaluate brokers. In general, volume and growth-potential criteria are fairly simple: current volume you sell to the lender and total volume that you originate overall.

In addition, lenders typically will look at the type of loans you originate and compare this to their sweet spots. As a broker, you should have your historical and projected volume data broken out by product type for a lender to review.

Profitability and quality criteria can
vary widely from lender to lender. the
critical criteria that lenders often evalu-
ate include the following:
• Average;sales;profit;per;loan is gen-
erated based on your volume. Do
your best to show lenders that you
can make a consistent profit for them.

• The;average;number;of;stipulations (e.g., missing documentation, etc.) per loan file submitted can hurt you. If your files are poorly documented, it will cost the lender more money to review and close your loan and will thus affect your rating adversely.

• Pull-through is the number of files you lock or submit versus the number of loans you submit that the lender actually funds. Doing your best to make sure the deals you submit are solid increases your pull-through and invariably makes the lender look better in front of investors.

• The number;of;disclosure;mistakes made is a new criterion that many lenders are tracking. If the lender has to spend a lot of time re-disclosing because of broker errors on the initial disclosures, it will notice.

• Number;of;repurchases that a lender has to absorb with loans that you submitted. repurchases could be caused by poorly under written loans or loans that were refinanced by you or someone else within a short time frame that causes the lender to have to buy back the loan. try to follow your loans closely throughout their lifecycle, and make sure you communicate well with underwriter, processor and borrower.

• Risk management evaluates your financial condition — especially net worth — and your internal loan-officer compliance-management processes and procedures. Make sure you adhere to every new piece of regulation out there.

• Lender-platform;adoption is still an issue with many brokers — and it drives lenders crazy. Lenders often decrease their origination costs per loan by pushing work to their point-of-sale platforms. by adopting their technology and enjoying the efficien-cies, you will make it easier for your lender to do business with you.

Show your worth

Lenders’ account executives do not always gather the data they need to evaluate and classify mortgage brokers properly, so you must be proactive. Successful brokers should have the following information ready when they are meeting with a new lender or updating a current lender:

• Volume;you;submitted;to;the;lender in;the;past;six;months, as well as overall volume originated for your company, broken down by program type.

• Growth plans and volume projec- tions;for;the;next;12;months. Lenders may offer incentives to keep your business if they are convinced your growth is real.

• Past performance related to pull-through and lender-platform utilization. Even more important, provide the lender with commitment targets for these areas.

• Product-type;volume;commitments will help you sell the rationalization for pricing incentives upfront, but make sure they are achievable. Ask the lender what its sweet spots are and see if you can commit to providing them volume in those areas.

• Lender-improvement opportunities. these should be discussed last. Most brokers start with this, beating the lender up on service and pricing, which immediately puts lenders on the defensive.

•••

the bottom line is that the mortgage industry has changed drastically in a short period of time, and the wholesale-lend-ing channel faces some of the toughest changes in the industry. those lenders and investors that are still actively involved in wholesale lending evaluate brokers far differently than before.

to make yourself a more marketable, successful broker, know the criteria used to judge you in the mortgage industry’s new order. today’s lenders are more selective and discriminating in who they do business with. be cognizant of this, because what you may not be doing can hurt you. •

David Colwell is executive vice president of Loan-Score Decisioning Systems, an enterprise-class-pricing and automated-under-writing-solutions provider. He has more than 23 years of experience in financial services and mortgage banking. colwell has a deep understanding of mortgage-technology solutions and has worked for organizations such as Portellus Inc., Mortgage cadence, United capital Funding, Wells Fargo, capgemini, Arthur Andersen and others. reach him at (623) 693-1237 or dcolwell@loan-score.com. the company’s Web address is loan-score.com.