By David Lykken
Special to MPA
When it comes to establishing a relationship with a vendor, our industry is one of the toughest. A simple handshake will not do -- and neither will merely signing on a dotted line. When deciding to business with vendors in the mortgage industry, we need to make sure each side of the knows exactly what it's giving and what it's receiving. We need to create a solid vendor agreement.
What does it take to create a great vendor agreement? While there is certainly more to it than can be covered in a short article, I can offer a few guidelines...
First, you want to be sure that the agreement is laid out with provisions about expectations and the consequences should those expectations not be met. Each party must know what they are getting themselves into.
Next, you want to be sure you are monitoring how well vendors are sticking to the agreement after it is signed. The agreement is a sort of living document -- you must continue to ensure that the vendor is making good on its promises and is in compliance. Your work is never done.
Finally, if the vendor does stray from the agreement or is not in compliance in some way, it is absolutely imperative that you take some sort of action. Whether it is termination or reprimand or restructuring the agreement, you need to do something to let the CFPB and other regulatory bodies know that you are taking the agreement seriously.
David Lykken is 40-year industry veteran who consults on virtually all aspects of mortgage banking. David hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals.