Mortgage Lender Broker Packages
If you’re a mortgage broker, chances are you’ve scoured the Internet and other mortgage industry resources to find banks and lenders to work with.
As a service to your clients, it’s necessary to sign up with a multitude of different lenders to ensure that you have a wide array of products and programs to meet their needs.
So how does one sign up with a new bank or lender?
The answer is rather simple, although the process can sometimes be overbearing. If you visit a lender website, you should find a link to “new brokers” or “broker packages”. If you follow these links you’ll find the mortgage lender broker package that must be filled out and returned for processing.
The broker package form should be fairly complex, asking for personal information, office and branch info, and tax and licensing details.
Some lenders will allow you to fill out the form online, while others may request that you print it out and fax or mail a signed, original copy. Either way, there’s a great chance that you’ll need to send over original documents such as tax forms or social security information, so the process will be rather time consuming.
The bank or lender will also perform a credit check to make sure everything is kosher. They may accept a credit report furnished by the broker, but check with the lender before assuming it will be acceptable. Note that anything negative that comes up on the credit report can be detrimental to your approval status, even unrelated criminal charges.
You’ll also need to provide references. This is where things can get a little tricky, as banks and lenders typically require a few references, but if you’re just starting up, you’ll have difficulty providing any. Also keep in mind that references must come from a competing bank or lender, and chances are they won’t be very forthcoming.
However, the referral issue may not be a problem with certain banks or lenders, with some being more forgiving to brokers with less experience. Just be sure to shop around. Typically, smaller banks and lenders will be more willing to take on an inexperienced broker than a large, well-established lender would.
You don’t always need a mortgage lender broker package to submit a loan!
If the bank or lender demands references prior to approval, ask if a submitted loan will be sufficient instead. Many lenders will allow you to submit a loan prior to broker approval and simply make the broker package requirement a prior-to-doc condition once the loan is approved. Just make sure you inquire with the lender to see if this is an option before trying to submit the loan.
To that effect, many lenders nowadays require a loan submission before they will even review a new broker package. Mainly because in the past brokers would sign up with as many banks and lenders as possible, but ultimately use just one or two. The result would be tons of extra paperwork for lenders that never saw a submitted loan from these brokers. Plus the review process would be bottlenecked by brokers who had little intention of using the bank or lender to begin with, causing unnecessary delays for brokers who had submitted loans.
So the key really is to worry about getting your hands on a loan before stressing about broker approval with the top lenders. Chances are you’ll be able to submit a loan to a vast array of lenders regardless of your approval status.
