Given the option, most brokers understandably prefer the prime space, but as B-20 has rendered it prohibitive for a great many borrowers, they’re in search of solutions
Guideline B-20 has been somewhat of a boon to the alternative lending space, but as the market trudges along, lenders are busier than ever with broker outreach.
“The most important thing we try to tell brokers is that we want to be their partner and stand next to them,” said Lisa Abbatangelo, vice president of mortgage operations at Community Trust. “Of course we can help them with their deals, but rather than work on a transactional basis like a factory, we want to help them with their business and for them to help us understand their strategy, vision and goals.”
Given the option, most brokers understandably prefer the prime space, but as B-20 has rendered it prohibitive for a great many borrowers, they’re in search of solutions.
“Brokers have always worked with us in the alternative space, and they’re still there, but, definitely, some brokers who previously spent most of their time in the prime space are giving us some calls to find out what we do and how we can help them,” said Abbatangelo. “I think that, for the brokers who aren’t used to working with lenders in the alternative space, it takes time to build those relationships and to get to know each other.”
Rajan Kaushal, president of Tribecca Finance, expects the alternative space to keep growing—and with it, Tribecca. He added that—as any broker would know—the stronger the relationship, the stronger the accommodation.
“The majority of our business comes from the mortgage broker industry, and some relationships have been built over 15, 20 years,” he said. “When the relationship builds, we can do more in terms of providing the broker more exceptions and more accommodations. Once those relationships build, many good things come from it. The broker definitely benefits.”
The market has been slower this spring than many anticipated. While, because of B-20, a slow first quarter was expected, most observers thought spring would be frenzied as usual. Kaushal says that has made the alternative space even more essential.
“It brings a lot of value,” he said. “With sales being down and less there being less activity, brokers need to look at all aspects in terms of being able to do more business and do more mortgages with the alternative side. There are many products outside of conventional mortgages. Having access to relationships with alternative lenders allow them to do more for their clients and to service them better, and, ultimately, to do more business in an environment in which there’s less activity.”
