Lender Funding Ratios

Mortgage-funding-ratios Don’t you hate it when someone rings your doorbell and runs away?

That’s the way lenders feel when brokers cancel far more deals than they close.  Lately, lenders have been doing something about it:  cutting brokers off. 

Xceed Mortgage announced the latest such policy today.  Starting September 1, Xceed will reportedly limit its relationships to brokers in its “Prestige” program, and/or those with total funding ratios over 15%.

Polices like this are basically a matter of limited resources.  It takes a lot of manpower to support and underwrite a client’s application.  With margins today as tight as they are, multiple dead deals can really eat into a lender’s profitability. 

Folks might not be very sympathetic to their plight, but lenders are in business to make money.  Moreover, brokers who cancel deals regularly eat into the time a lender can spend on servicing brokers who close deals regularly.

Look for more lenders to follow suit as time goes on.  If this catches on in the next few years, it will force brokers to spend a lot more time qualifying their clients and underwriting their own deals.  Heck, maybe someday lenders will even start charging brokers for canceling deals.

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