On the Access Desk



For small- to medium-sized brokers, there are few services a broker network can provide that are more valuable than a good centralized underwriting hub.

Underwriting hubs afford brokers a way to

  • access lenders that they might not have status with
  • receive guidance on challenging deals
  • get better pricing, faster turnaround and better compensation

We spent an afternoon on Invis-Mortgage Intelligence’s deal desk to see if these hubs are really all they’re cracked up to be. Here’s that story.

Invis-MI calls its hub the “Access Desk.” About 15% of the company’s 1,000+ agents use the service, says Scott Musselman, VP Operations. The Access team averages about eight deals per day (2,000 per year), but is especially busy in March through May. “In spring we might as well just sleep here,” says Steve Sadler, who started the Access Desk in 2009.

The concept of the Access Desk was for agents to have status with more lenders, Sadler explains. The desk has top-tier status with 10 lenders, some of which occasionally offer Invis-MI rate and product specials because of the desk’s efficiency. The service has been so popular, he says, that Access Desk volume has grown 20-40% every year since 2009.

Invis-MI“We help a lot of rookies with deals,” says Musselman, but you don’t have to be a rookie to benefit from the service. “We’re also here as a second set of eyes on a deal, even for experienced agents.”

“Some agents simply need a status rate or help structuring a deal,” Sadler adds. “We get to see it all. The quirks of all these deals stick with you so that when someone calls us up, we can say we’ve seen that before.” That experience pays. “We’ve been around a long time and have really good relationships with our lenders’ underwriters.” That often helps Access underwriters better communicate applications to lenders, thus maximizing the chances of approval.

One of the most important benefits of a deal desk is agent support. Invis-MI’s hub underwriters are essentially deal gurus on demand. “Any agent can call us up and ask us where a deal will fit,” Sadler says. Very few broker houses offer that service.

The hub offers benefits to lenders as well, including

  • Productivity: “We drive efficiency with the lender,” Sadler says, “because we expect a 75% funding ratio from agents on the apps they submit.” And nearly all Invis-MI agents comply. “I haven’t cut anyone off in three years for not meeting funding ratios.”
  • Staff savings: “We are basically BDMs for the lenders,” and that saves them time and manpower, he adds. “Every week we send an email to brokers with updated rates from the Access Desk, niche products and updates to lender guidelines.”

“When I started, we were knocking on lenders’ doors to get on their lists,” Sadler recalls. “Now the lenders are knocking on our door to get on the Access Desk.”

Despite the required funding ratio, there is no minimum approval ratio. The desk underwriters encourage all bona fide submissions, and since every deal is screened, lender approval ratios are not a concern.

The procedure for submitting a deal is as follows:

  1. The agent sets the rate and inputs an application as usual
  2. The agent then assigns the deal to the Access Desk
  3. The desk gets a notice on D+H Expert that a deal has come in
  4. The underwriter reviews the deal against lender guidelines
  5. If the deal fits the lender, it is submitted for approval
  6. The lender issues the approval, which is forwarded to the agent
  7. The broker presents the approval to the client as usual
  8. Client documents are collected and submitted to the access desk
  9. The desk reviews the documentation and forwards it to the lender.

“We look to ensure that the application fits with the lender. Otherwise, we pick up the phone to learn more about the deal,” Sadler says. “Once the lender gets the deal, it should be an easy approval.”

One question that comes up occasionally is whether hubs reduce lender control over who they deal with. Sadler made it clear that the desk is not a way for banned brokers to access lenders. “If a lender has cut an agent off, they’re not welcome on the desk. We let the lenders know on every submission who the agent is.”

On the topic of cost, it doesn’t cost anything for agents to send in-province deals. Brokers receive full finder’s fees and full volume bonus. The Access Desk is primarily funded by the efficiency bonuses paid by lenders and a nominal fee applied to out-of-province deals. (Mind you, that can amount to a lot of compensation depending on the lender.)

Other broker networks also have successful deal desks, including Mortgage Alliance, Axiom Mortgage, TMG and Mortgage Architects. With competitive pricing and lender access being more important than ever, deal hubs should be a key consideration—especially for smaller agents—when sizing up a new brokerage.

 

 

 

 

 

 

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Comments

  1. Comment avatar

    Ross Taylor    

    Surprised to read this article Rob, but I can tell you it’s all true. Now the secret is out!

     
  2. Comment avatar

    Ron Butler    

    Good article Rob. These Hubs just make sense, I think TMG also has a good one. The key for most lenders is to have easy to access to rational mortgage professionals available to present a deal and answer questions on the file and many new or very low volume agents often fail those tests; so the Deal Hub works well for lenders. It does call into question the future of this business, if the mortgage agent never gets enough training or experience to become a skilled underwriter able to present deals what really is their function? I was told by a mortgage agent yesterday that their brokerage forced them to have document packages prepared by the office staff, mortgage agents could not be trusted to get the disclosure right. Another brokerage owner told me that his concept of the best mortgage agent was someone who never exceeded $10 Million in annual production because that way the agent did enough business to keep around and yet not enough volume to have leverage to get a better split. From the day I started in this business all I could ever think about was how to get to $100 million a year, if I did not make it I would be a failure. Many years later the new agent that a brokerage is aiming to find seems to be someone who will write about $10 Million, and needs the brokerage to send in their deals and produce their compliance documents, really just a birddog who knows how to get referrals, keep a Realtor or two happy and not much more than that. And people wonder why I changed to salaried staff.

     
    1. Robert McLister    

      Thanks Ron. We’re going to see more networks and brokerages offering full outsourcing of underwriting and back-end support. The question will then be, can brokers who subscribe to such services counsel customers as effectively. They’ll certainly spend more time selling than actually processing mortgages. But perhaps some will also free up time to hone their product knowledge.

       
      Comment avatar
    2. Dan Pultr    

      Thanks Ron for your mention of our TMG Deal Centre. It has been a significant benefit for our team, and the two individuals we have running it are what I like to call Mortgage Mensa, it amazes me what they know. Having access to lenders is important (which I think we’re top tier or have access to about 15-20), but what’s even more important is ensuring the quality of all applications that hit our lenders is top notch. It’s amazing what I hear from some of the BDMs about what goes on out there. Pre-scrubbing of deals for those less experienced is a valuable function of these hubs, and helps eliminate some of these issues. Lastly, I think one of the most rewarding things we see is growing a broker from $3-7M in production to $20-$30M in production, simply by the guidance and mentorship of our hub, we really want them submitting on their own at the end of the day, everybody wins.

       
      Comment avatar
  3. Comment avatar

    Jim bob    

    There is another type of hub that should be mentioned which comes from the lender side. Some lenders now have teams of internal BDM’s that partner with brokerage underwriting hubs. This partnership further increases efficiency and productivity for both sides. The lender internal BDM hub is also a perfect match for high volume internet brokers which are practically a hub in themselves. Ron is absolutely right about how technology is changing this business and disrupting the traditional brokering model. The lenders who move with the times and set up internal BDM hubs are aware of this too and are not sitting still. Merix and First National have a team of experienced internal BDM’s and from what I hear they are excellent at what they do.

     
    1. Robert McLister    

      Thanks JB, For the benefit of those who aren’t too familiar with hub BDMs (myself included), what do they do that is different from a traditional BDM?

       
      Comment avatar

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