As a broker, it’s crucial for you to choose the best possible commercial mortgage lenders to work with, both for your benefit and your client’s. Taking the time to research a lender will not only help you to determine that they’re legitimate, but also that they’re a good fit for you and your borrower. This is especially important when you’re working with borrowers seeking financing outside of traditional sources like the bank.
While there are plenty of legitimate non-conforming lenders for commercial borrowers, there are unfortunately scams within the mortgage industry for which brokers should be on the lookout. These scams generally involve a “lender” that charges large upfront fees and then claims that they will be unable to fund the request.
Here are some steps you can take to make sure you and your borrower aren’t duped:
Do some basic research.
We live in an age of Internet reviews, so it’s likely that if people have had an experience with a scam lender, they’ve posted something about it online.
You can do a quick web search of a lender’s name to see what people have to say about the way they do business.
Talk to the lender.
This is always an important step when determining whether you should work with a commercial mortgage lender. Discuss their process with them. Ask them questions and make sure they give satisfactory answers. Be wary of lenders that don’t do their underwriting upfront or haven’t been around for very long.
Ask for references.
Another way to make sure a non-conforming commercial mortgage lender is a good fit for you is to ask for references.
Ask them to provide contact information for several brokers with whom they’ve done business, and ask those brokers about their experience with the lender.
It’s important for brokers to do their due diligence when it comes to selecting a non-conforming commercial mortgage lender. Taking the simple steps above will allow you to determine whether a lender is the real deal. Choosing a lender who will be a good fit for your borrowers benefits you because it means more satisfied customers and more closed deals. Check out our previous post on the Horror of Choosing the Wrong Commercial Mortgage Lender.