The Business Loan Connection
is a service that links mortgage originators with warehouse credit. Business Loan Connection principal Robert Rubin has been a licensed Michigan Real Estate Broker since 1966 and possesses more than 35 years experience in the real estate finance industry. For this installment of In This Corner
, Rubin talks about the importance of aligning originators with appropriate lenders.
How did you get the idea to start The Business Loan Connection?
I started it in November of 2009, but I've been in the mortgage and real estate business since 1964 and in the ensuing years have had my own very successful mortgage banking operation. In 2007, when everything hit the wall, I saw that I couldn't keep the company going.
I used to say trees don't go through the clouds. I just didn't listen to myself. I had opportunities to sell my business, and I didn't because -- who would ever have thought, even though I knew from an economic standpoint we're in a free market and what goes up can go down.
I emerged from that using my knowledge in the area I worked so long in, mortgage banking, to establish my current operation, which benefits from the many friends I’ve made who are running mortgage warehouse operations for banks. I am very discerning with the type of client I bring them. When I bring them someone, I've already pre-qualified them. It's important to keep the level of integrity high with my banking connections.
What's changed since 1964 that The Business Loan Connection is necessary?
The thing that changed was the availability and liquidity of credit. Before, everyone, if they could breathe, they'd get a mortgage. This had to come to an end. There were a lot of substandard properties that were going through and that's how the whole bubble burst.
Credit has tightened substantially since then. How can originators overcome the tight credit situation?
I think they have to align themselves with sources of loans that are going to bring in higher quality people. For example, someone who becomes a niche player in jumbo loans and really markets themselves well and phrases everything in terms of looking for those clients who are really solid citizens from a credit standpoint that is a way to enter the market.
I have an old friend from Connecticut who's doing this and the word is out. Now with the doors opening up in terms of securitization, he's going to do very well. So, it's really going into markets where you have a better assurance of getting things through and having people in the field who aren't just looking today, but who are looking at this as a profession.
What standards do you use to measure the success of matching an originator with a lender?
Was I able to get them the line that best fit their needs? Was I able to place them with the best lender for them? Was I able to deliver what they requested- line amount, acceptable rate, ability to grow facility, acceptable haircut? How responsive was the bank to my client and my client to the bank - was there a sense of urgency throughout the process? Was the bank happy with the presentation of the application and the response time of my client? Was everyone on the same page at all times? Did I leave the bank with the sense that they want to do more business through me? Did I meet my clients' expeditions?