The Lender-Trained Real Estate Agent is Top of Game

A top-producing real estate broker once said “the best agent in real estate is one who is lender-trained.”  As someone who previously managed all aspects of marketing and compliance for a mortgage firm, I had the benefit of working under the guidance of three different presidents of Oregon’s mortgage professional association and learned a great deal about how the relationships they built with industry partners made the collective work easier and produced a superior net goal for the client.

Many real estate agents will suggest to “stay in your wheelhouse.”  To me, that statement presents issues for prospective clients on a number of levels.  By no means do I advocate that the agent should be involved in the pre-approval process for a mortgage loan – but it is fundamental to the backbone of the real estate profession that we understand the nuances of critical tasks we entrust as referrals to a loan originator.  Here are some basic items that brokers in any market segment should understand:

1)     A footprint of the mortgage loan program landscape and how to get information from the client so a referral is beneficial for everyone (i.e. a private bank loan originator who may leverage certain appropriate products will have a completely different lens than one who specializes in reverse mortgage products etc.)

2)     Knowledge of how and where mortgage loans are qualified, processed, and closed.  If a real estate agent knows that a certain set of documents are needed for a solid pre-approval, they should arm their clients with the information to make the transaction successful from the beginning in addition to what tools and overrides are available to the mortgage company to obtain the desired result.  Penrith Home Loans (disclosure: owned by my company, Windermere) has remarkable access and flexibility to meet timelines and its leadership is as hands-on as local originators may need them to be.

3)     Overarching knowledge of financial markets and mortgage loans.  If a broker does not have a grasp on financial indicators, they have lost touch with being a touchstone and central figure of a transaction.  Maintaining thought leadership is part of the real estate broker’s role and that expectation increases as the level of sophistication of a transaction increases as well.

As a client, here is a fun test for your real estate professional.  You’ll know you’ve selected a leading real estate advisor if they know the following answers:

1)     How many members are there of the Federal Reserve Board and what are they called?
Answer: The seven members of the Federal Reserve Board are called Governors

2)    What is a tranche?
Answer: Tranches are segments created from a pool of securities—usually debt instruments such as bonds or mortgages—that are divided up by risk, time to maturity, or other characteristics in order to be marketable to different investors.

3)     How are mortgage interest rates determined?
Answer: The Federal Reserve, bond market, Secured Overnight Finance Rate, Constant Maturity Treasury and the health of the economy and inflation all affect mortgage rates.

4)     What economist has a real estate index named for him?
Answer: Yale Economist Robert Shiller.  The S&P CoreLogic Case-Shiller Home Price Indices are a group of indices that measure real estate or housing prices. They track changes in residential home prices throughout the United States.

5)     What bureau in the US Government supervises consumer finance regulation?
Answer: The CFPB was created to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace.

6)     BONUS: What company is America’s largest loan servicer?
Answer: Wells Fargo with a $962 billion portfolio.  The bank plans to reduce its servicing to concentrate more on bank customers and minority communities.  Loan servicing is described as the administrative aspects of a loan from the time the proceeds are dispersed to the borrower until the loan is paid off.

This quiz is part of assessing the overall fitness of the real estate professional to know macro finance influencers that contribute to stellar client relations experience and representation.  It's nice to be lender-trained.  Enjoy!