By David Lykken
Special to MPA
Selecting vendors with which you choose to do business in the mortgage industry is no small task. In many industries, it's easy easy as sending out a request for a quote, looking at the numbers, and signing a contract. Not too much thought has to go into it -- just a simple "yes" or "no."
In our industry, things aren't so simple. Choosing the correct vendor can make or break us. Of course, just like any other industry, we need to be sure we are choosing a vendor that is going to come through for us -- a vendor that will help us in serving our customers. But the major difference in our industry comes down to the regulation. If we choose a vendor poorly, it can come back to bite us legally. And that's where due diligence comes in.
The question that always comes up when I discuss due diligence with the vendor is, "How much do I need to do?" The answer: as much as you can. Of course, resources are finite and you can never be absolutely sure of anything. But it is absolutely imperative that you do your best with investigating vendors before you sign contracts.
Here's something to keep in mind: the bottom line in selecting a vendor is protecting consumers from harm. That is what the regulatory bodies are interested in, and that is what you should focus on as well. If you keep that guiding principle on your radar, you should be able to do the greatest amount of due diligence with the fewest resources possible.
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.