Many of the banks and lenders we work with pay us referral fees and or yield spread, outside of close. This is especially true with SBA loans as brokers are not allowed to be paid out of the proceeds of the loan, ie it’s a direct violation of the SBA’s SOP. So we and many other brokers get paid referral fees after the loan is closed by the lender.
The problem is, because you are not identified on the settlement statement/being wired at funding, you have to depend on the lender to cut you a check after closing. And most banks drag the payment out by a week or two, some longer. So, how do you know you are really going to get paid from the funding bank? For example, most of the Business Development Officers (loan officers )out there just want to send a simple 1 or 2 sentence email stating that they will pay 1%, or whatever the fee is, outside of close. I don’t know about you, but when I have 4 months into a deal and stand to lose a $20,000 referral fee, I don’t sleep well with a one sentence email backing me up.
And we have certainly learned the hard way, that banks and lenders will push brokers around and not pay them all of any of their hard earned fees. Over the years we have been burned a few times by some of the largest conventional banks and SBA lenders in the nation. Even if you are working with a loan officer you know and trust, they can get fired, die, make mistakes or turn on you. So even if you feel good that your loan officer has every intention of paying you, you still may have issues.
We put our attorney back to work and had him draft this agreement, aimed at solving this issue. We paid him just under $500 for it. It outlines the ongoing relationship between us the broker and the lender/bank.
By the way, even if your bank won’t sign this agreement, it will at least 1. show them you know what you are doing and that you need to have a fee agreement in writing and 2. it will most likely “inspire” them to send you the agreement they already have in house, that they have not sent you or told you about.
Don’t let banks push you around. There is too much at risk here in this market to close a loan and not get paid on it.
We are offering it for $70. Note that it comes in a Word document, so you can easily change it and it will be emailed to you instantly upon purchase, via our software program (Note all of our fee agreements below are in Word and are emailed instantly to you upon purchase).
Combo Agreement Package
Or get ALL of our agreements, which includes 1. the comprehensive Commercial Mortgage Broker Agreement; 2. the simple Mortgage Broker Fee Agreements (there are 2 separate agreements in one); 3. the Co Broker Agreement; 4. the Non Circumvent, Non Disclosure and Confidentiality Agreement and 5. the Agreement Between Broker and Lender. $305 if purchased separately or get ALL for only $225 (We paid our attorney’s over $4,000 for all of them). All come in Word and are emailed instantly upon purchase.