With high-speed access to the internet, email, scanners with automatic document feeders, PDF software, and cloud computing –
the typical commercial mortgage broker does not need a single employee.
If you currently have a loan processor and several junior loan officers working for you, I strongly encourage you to let them go as soon as possible.
You certainly don’t need a loan processor. You can simply do the loan processing yourself. After all, your commercial lender will do most of the actual loan processing.
Your job is to solicit deals, screen them, figure out the most suitable commercial lender for the deal, present the deal in an organized and understandable manner (usually as a PDF), and to fetch the loan documents.
You don’t need a loan processor to do any of these things. In fact, it will usually take you far longer to explain the deal to your processor than to just do the packaging yourself.
You will solicit commercial loans yourself using email and fax newsletters. You have to write these newsletters yourself. When you’re done writing the newsletter, you simply email it off to ConstantContact (email newsletter service) or Westfax (fax service) for delivery. There is little that a loan processor can do to help you here.
You’ll have to read the loan documents yourself, so there is little that a loan processor can do here to help you to underwrite any of your loans.
In the old days, hard copies of commercial loan packages were delivered by Fed Ex, the U.S. Postal Service, or in person. A commercial mortgage broker desperately needed a loan processor back then to assemble the package and to make multiple copies of it.
Modernly, you will assemble your commercial loan package on your personal computer and then turn it into a PDF. Delivery will be accomplished by email. There is nothing for your loan processor to assemble, collate, and photocopy.
What about the really thick legal documents, like tax returns and lengthy LLC Operating Agreements? They are usually too large to be sent by email.
The custom today is to simply scan these documents, turn them into a PDF; upload them to some cloud computing service, like Box.net or Dropbox.com; and then to send your lender a link by email with instructions on how to download the documents.
You do NOT need a loan processor to scan a tax return when your scanner has an automatic document feeder. You can perform the whole function yourself in less time than it would take to explain the task to your processor.
Commercial mortgage brokers simply no longer need a loan processor.
“But George, won’t a loan processor make me more efficient?”
Here’s the problem: Commercial mortgage brokers typically close their deals in clumps. Life would be so much easier if a commercial mortgage broker could count on closing two to three deals every month. It doesn’t happen that way in real life.
The typical commercial mortgage broker will go at least 70 days between loan closings several times per year. He may close 30+ loans per year, but he will go 70+ days between loan closings at least twice a year. (Then he’ll close five or six deals in a two-week period.)
Paying out a salary to a loan processor after you have gone 70 days without a loan closing is a budget buster.
Don’t do it. You do NOT need a loan processor.
“But George, won’t I get lonely?”
If you get lonely, move out of the house and rent a desk in some realtor’s office. But don’t hire a loan processor!
I also think that you should NOT train junior loan officers to work alongside you in your office. You will waste 50+ working hours training each loan officer - hours that would have been better spent making sales and working on your personal newsletter lists.
Then, just when your junior loan officer finally starts making you money - after disturbing you daily for 14 months - your junior loan officer will leave you to go to work for another commercial mortgage broker down the street. He’ll become your competitor.
Don’t do it. Don’t take time away from your personal selling. Don’t train your future competition. Do not hire and train junior loan officers.
Folks, if you want to make and keep a lot of money in the commercial mortgage business, fire all of your staff.
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