The Mortgage Brokers Who Never Get a Loan Financed

More than in any other industry I know, the loan brokerage/note broker business seems to attract more clueless individuals believing they can “broker” loans or notes. Of course, there are many great, competent, hard working brokers who bring us the vast majority of our deals. My experience in dealing with the clueless individuals have led to me classifying them as follow

The Lazy Broker - They want 3 percent for passing paper between parties. They are NEVER the broker of record, never have a relationship with a principal, and rarely even have a relationship with a broker whose direct to a principal. They pass some very preliminary information on to a lender concerning a loan the lender has seen from 4 other brokers, and want you to “protect” their “3 percent” fee.

The Legal Expert - This "expert" wants you to sign an 18 page NDA agreement; agree to give them a 6 month "exclusive" for "finding" deals; and wants you to sign a lender - broker agreement of 82 pages. Further, the only information they can provide on any subject property is legal; property legal description, past lawsuits, LLC formation for borrower. When asked for historical financials, rent rolls, appraisals, etc., their response is "why do you need that?"

No Information Needed - This guy ( or gal ) has absolutely no information other than the property address, which they usually get incorrect. They ignore your interactive online loan information form, and sent you an email or text with the property address and the question “how much can you lend on this”. When you inform them of the documents needed and the loan information sheet to be filled out, you don’t hear from them for 6 weeks. You then receive an email with one of the ten items you requested as an attachment.

The Know it All - This character has done all your due diligence and underwriting for you, and in his introductory email or phone call tells you why this loan is perfect, low risk, high return and why you should do it. He also provides “backup” for his position, usually consisting historical financials “reworked” by himself to reflect fantasy land; projections submitted by a borrower desperate for a loan; a letter of explanation as to why the borrower has failed to file the last 4 years tax returns.

The Spammer - This may be  the most puzzling of all. He sends a blast email about a loan request, or a note for sale to 240,000 people, and even if someone is interested enough to email back he never responds. Three months later you receive an email offering the same loan. Again he never responds. He tends to send monthly emails, and has never responded to anyone you know and never closed a deal. Perhaps he’s passed away, but had entered a long term email marketing program thats on auto pilot and can’t be shut off.