Sourcing non-agency clients through alternative sources

by Contributor26 Mar 2019

by Michael Brenning

If you are like most great originators, you have a fully-formed referral network full of real estate agents and CPAs. What you may not have, however, is a completely well-rounded referral base when it comes to sourcing non-agency business, what has become known over the last few years as non-QM.

You certainly should be marketing your knowledge of non-QM to your traditional sources, making your name The Name associated with self-employed clients, clients with recent credit issues, larger loan amounts, i.e., non-QM lending needs.

To succeed in 2019 and beyond, you need to expand your referral base beyond your traditional sources. There are several compelling ways to do this and the answers might surprise you. First, I encourage you to call on local bank and credit union loan officers that are near your branch and your marketing area. This might seem like a crazy idea at first, but stay with me. Banks and credit unions have all the same products you have, plus they generally have a portfolio product or two. You have spent your career looking at them as the competition. You aren’t wrong for thinking this or feeling this way, and they are certainly competition on government supported loan programs.

Now, here comes the paradigm shift.

Banks and credit unions are not your competition when it comes to non-QM clients. If a client/member of a bank or credit union doesn’t fit the government or portfolio box, the loan application will result in a turn-down, which is exactly the last thing that a bank or credit union wants to have happen.

We’ve found that bank and credit union loan officers are willing referral sources. Rather than turn down a client or a member, they can refer these clients to you—and you’ve just developed a new lead source. It doesn’t take much to make the connection.

Research all the local bank and credit union branches in your area. Most financial institutions have their LOs listed online, and certainly have them in NMLS. Put these loan officers into your call pattern, email pattern, and marketing patterns. Take them out for a lunch or coffee. Tell them your intent. It’s likely they will be receptive given their desire to not have a client go unserved in some capacity. You might even find you’ll have a client or two to refer to them over time.

Take the time and make the investment in expanding your referral sources to include non-traditional sources like financial institution loan officers, and watch your non-QM business grow.