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Special Reports
Document Services
Tech Being Used To Help Broker
By Anthony Garritano
With market conditions being what they are, most wouldn't decide to enter the
mortgage market at this point, but D&R Financial Group has done just that with the help of some outsourcing
technology to automate their document closing and post-closing services. "I had been a broker for six years
before making the transition to a mortgage banker," said Joseph Dufresne, president at D&R.
"Everyone told us that we were crazy for opening a mortgage business in this
market. However, as a small lender, rates don't make a difference because we get paid on the transaction. We've
also been successful in identifying individuals that have been downsized as a result of this market. The pie is
very big. We differentiate ourselves based on customer service, turn time and education."
D&R is a broker/banker that started in March 2006. The company is in nine states right now, focusing on the
first-time homebuyer market. The goal is to be in all 50 states by the end of this year. "We were referred
to Guardian Mortgage Services as being a potential solution for broker/bankers that want to play on the same field
as the Countrywides," said Mr. Dufresne. "GMS let us get off the ground with a level of experience and
service that would have been tough for us to staff as a new company. To us, GMS makes us scalable to process two
or 200 loans a month. We're growing very quickly so scalability is key.
"Second, GMS offers us salability. We make our money when our loans are sold
into the secondary market. GMS ensures that our files are salable based on the guidelines we give them. Last, we
see huge compliance gains in using GMS. We lean on GMS to be up to date, accurate and efficient to both notice
problems before they happen and fix problems if they do exist," he said.
The GMS application is Web based and allows complete visibility into the loan file, but does require some getting
used to. "There's a learning curve that goes into it but once the ball is moving it was easy for us to proceed,"
pointed out Mr. Dufresne.
"We had a high level of support on the GMS side. As we move into new states
we'd be spending a lot on lawyers instead of just relying on GMS.
"We want to be known for our 500 FICO product that provides 100% financing
on a 30-year fixed. We also have a 620 product that we just rolled out. We also offer 'makes sense' underwriting
that takes into account payment history, employment, home location, etc., beyond just the credit score."
D&R's relationship with Texas Capital Bank, Dallas, started the relationship with GMS. "We have a nontraditional
warehouse lending program," explained Ian Wright, senior vice president and director of national sales at
Texas Capital. "In order to get less experienced companies into warehouse lending we've set up this system.
A lot of brokers are moving to bankers so we launched this program to do away with the high-worth requirement and
go with a smaller company provided that they go with a third party like GMS.
"In order to work with us the broker/banker has to hire two to three people
to do the back-office work or hire GMS to outsource that function. We feel very comfortable with GMS and the customer
only pays on a transaction basis, so everyone wins. GMS helps track the progression of the loan for us," he
noted. "In looking for an outsource partner we were looking for size and skill. Recently we had two blizzards
and there was no down time at all with GMS. The ability to rely on GMS is what we needed for our business. Prior,
we lost four days in Hurricane Rita. The fact that GMS is away from the coast and things are set up so employees
can work as long as they have electricity is key."
For brokers looking to make this transition and deal with entities like Texas Capital, Mr. Wright advises outsourcing.
"If you're going to make the transition from a broker to a banker the cost savings of outsourcing is twofold
because it's cheaper to pay as you go and you share responsibility with your partner. Brokers are good originators
but have limited experience beyond that, and that skill set is important when making the transition.
"You get security and scalability with an outsourcer. Also it's a neutral
set of eyes reviewing the final closing stips to ensure that the loan is right before we release funds. That's
critical to us. Going with GMS is a recommendation scenario for us right now," said Mr. Wright. "Texas
Capital Bank (warehouse line) has developed a mutually beneficial relationship with Guardian Mortgage Services
to help support their clients via back-office outsourcing (e.g., closing coordination, title and escrow, vendor
management, document preparation, post-closing)," added Tim Anschutz, vice president, marketing at Guardian
Mortgage Documents. "This is a scenario that benefits everyone, especially the broker-to-banker client.
"GMS continues to experience record demand for its back-office outsource
services which include vendor management, title and escrow, closing coordination, document preparation and post-closing
services. GMS is experiencing a strong trend in warehouse lines wanting to work with us for helping support their
new and existing clients in the back-office operations area."
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