How to Become a Direct Lender
How to Become a Direct Lender is a question often asked by those individuals already doing business as a mortgage broker. While requirements for becoming a mortgage broker can be affordable and easy to meet, how to become a direct lender is an entirely different thing.
At first glance, the most common route of becoming a direct lender seems to require an initial scrutinizing audit and high net worth requirements. The common net worth requirement to become a direct lender is at least a $200,000 in most states, and for some, obtaining a warehouse line of credit may be a challenge. Lastly, Not everyone will be approved after the audit since they may have not documented properly their practices, or predatory lending cases have been discovered. After understanding this, many Brokers put the idea of upgrading their business on hold.
A direct lender can be a correspondent lender, or a commercial bank, or a mortgage portfolio holder. All types of direct lenders underwrite, process and close loans on their own name and with their own funds. A mortgage broker may act as if they are closing and funding your loan, but they cannot do anything without the approval of the direct lender or investor. A mortgage broker does not close a loan in their own name either. The loan will be closed in the name of the company lending the money. In the case of correspondent lending though, company may be serving as a direct lender in some states, and as a broker in others.
An easier way to become a direct lender is to find an direct lender that would like to expand and has been in business for several years, and sign with them as a branch. In this instance, you could operate as direct lender and mortgage broker at the same time. Secondary Marketing Group specializes in assisting Brokers become lenders or Bankers without the high net worth requirements and with a limited audit. They can provide all of the necessary forms, documentation, manuals and even a $1 million warehouse line to get brokers upgraded to direct lender status. With the assistance of Secondary Marketing Group the Broker will now be able to close loans in their own name, enjoy increased revenue, and begin to originate FHA loans in addition to a host of other possibilities.
For more information on how to become a lender, complete the contact form Here and a Secondary Marketing Group representative will contact you.