Why send your private lending deal to one player when several are waiting on this new online app portal?
Al Kelly has hit on an idea whose time has come. That, at least, is his bet. Actually, it falls to lenders and brokers to decide the success of his brainchild – an application submission website not unlike Expert and MorWEB, but entirely focused on private lending.
“StrategicMatches.com is unique and has generally excited everyone who has been introduced to it,” the B.C.-based Kelly tells CMP. “Its purpose is very straightforward: to bring together mortgage broker applications with private lenders.”
The site allows brokers to float an application by any number of MIC's / private lenders, filtering out those whose lending criteria preclude their interest. The broker can then send the application to those for whom the deal fits the bill.
Either way, Strategic Matches is set to capitalize on real interest in private lending spurred by tighter mortgage rules and the kind of low rates responsible for putting that option on the radar screens of A brokers.
CMP: Explain a little more about the system.
Kelly: The lenders on the Strategic Matches system create and maintain a lending profile based on their lending criteria, effectively creating a set of filters to identify loan files of interest to them.
The broker inputs the details of their client application. Once the application is complete, the system identifies those lenders that would be interested in the loan file (based on the filtering process) and the broker submits the application to the interested lenders directly through the system.
CMP: It seems that the system could dramatically open up the private lending market for the broker and their client, as the system can identify a number of interested lenders for the broker to work with on any particular loan file. What are some of the other benefits to the brokers, especially the newbies to private lending?
Kelly: Given that there are many more lenders in this market segment than in the traditional mortgage market and that most brokers have limited experience in the private lending market, the site provides very simple access for a broker to present an application to the market, without having to know the lenders or their lending criteria. The submission will give their client's application broad exposure to the marketplace, with the obvious advantages that can bring.
Even for experienced brokers who know a number of private lenders, the site will relieve them of the need to keep up with changes by the lenders they know, and will likely introduce them to lenders they don't know, or lenders who now have an interest in a loan file that they might not have looked at in the past.
For all brokers, the system provides a big savings in time and frustration.
CMP: What's the learning curve on using this system?
Kelly: Once a broker uses the system a couple of times, it takes only a couple of minutes to complete an application for submission, and the site application (the requested information) is
tailored to the private lending market. The application specifies the information to be input, and directs the broker to comment on matters that they might not otherwise think about, - often matters that don't come up when presenting files to “A” lenders.
CMP: OK, who pays for this?
Kelly: There is no cost for a lender to use the system. I want to encourage every lender to register on the system and create a profile for themselves.
The system is currently set up so that the broker will pay a small referral fee when they successfully fund a mortgage arranged through the system. Otherwise, no cost.
CMP: You're betting brokers will pay that small fee. Why?
Kelly: As I mentioned earlier, the private lending market is a mystery to many brokers. There is no transparency in the market and there are a lot of lenders (well over 100 in B.C. alone). It is impossible for most brokers to keep up with the “A” market lenders, never mind the “B” or “C” market.
Many brokers now send their “B/C” files to “B” lender specialists, but in doing so, they give up control of their file and generally add another substantial layer to the fees that will be charged to their client.
This site allows the broker to maintain control of their client/file and the fees associated with the file.
Personally, I have been brokering for more than 11 years and have been involved managing small MIC's for more than 12 years.
As a broker I have had my share of files that I had difficulty placing because I didn't know the lenders in the market, and as a MIC lender, I often found myself with money to lend and no applications for loans that met my lending criteria.
I think these are common frustrations with many brokers and lenders, and this site is the result of my trying to resolve those frustrations, for me and everyone else!
CMP: You've already had some deals funded through Strategic Matches in Western Canada. The goal is to move eastward. How are you getting there?
Kelly: I have had discussions with a few of the national brokerages about rolling this site out to their brokers, and this is ongoing. I just completed my first webinar on May 7th, for a number of brokers in western Canada (B.C. to Manitoba) from one of the national firms.
A few of the B.C. lenders on the system do lend in more than one province, but in order to role the benefits of the site out across the country I am actively looking for partnership arrangements in most markets in eastern Canada.
For more info, go to www.strategicmatches.com