Which Mortgage Lenders Will Be Around Tomorrow

Foreclosures and credit tightening have rocked the mortgage industry, causing some lenders to go out of business. In this critical time when it's harder to close the number of loans you're used to, having relationships with lenders that will be around tomorrow and the next day is important. But how can you tell which ones will close their doors and which ones will stem the tide? This article presents four key signs of a mortgage lender that is more likely to remain strong in these turbulent times. If you do business with lenders who meet these criteria, you'll be able to spend your time finding and closing loans instead of searching out new lenders.

These four signs of staying power are:

1. Comprehensive Loan Portfolio.

2. Ability to quickly adapt loan guidelines to the changing environment.

3. Automation allowing rates competitive with top-tier lenders.

4. Technology allowing rapid alignment with secondary market investor requirements, leading to better quality loans.

You'll want to find a lender with a large loan portfolio for two reasons. First, the greater the variety of loans offered, the more likely you'll be able to find a loan that meets your borrower's financial situations. Second, with a variety of loan programs, the lender will be safer if some loan programs are discontinued. You'll also want a lender that can rapidly adapt its loan programs to meet the criteria of secondary market lenders. Some lenders sell their loans to investors in order to replenish their available capital. If the loans they fund do not meet investor requirements, the investor will not buy the loans and the lender may become cash strapped.

Besides modifying loan program guidelines, it is important to insert those guidelines into an automated underwriting system (AUS) that can underwrite loans in seconds, which will quickly ensure that borrowers qualify for a specific loan program. Rapid adaptation of loan programs and utilizing an AUS can help ensure that brokers submit saleable loans. This contributes to keeping the lender strong and prices down.

A third factor for success is automating multiple processes and incorporating the underwriting into the lending workflow. That way the lender reduces costs and increases its efficiencies, which allows it to provide competitive rates. Great rates are an incentive for brokers to use that lender and contribute to the lender's strength.

If you're a broker looking for the best wholesale lender, make sure whoever you choose uses the four keys listed above. Doing so means you'll be able to earn more money in less time.