In my last post I talked about what happens here when borrowers or brokers don’t perform for lenders – specifically, when borrowers or brokers submit a loan request and then don’t respond to subsequent inquiries from the lenders they submitted their loans to. There are a few different and interesting possible causes for this, which I may discuss in a future post. For now, I’m going to focus on the opposite types of cases: What happens here when lenders don’t perform for brokers and borrowers?
In other words, what happens when borrowers and brokers submit loan requests to lenders, and the lenders who receive the proposals either fail to follow up on the submissions, or follow up in an untimely manner?
The mechanics of the process are as follows:
- The borrower or broker submits the loan request.
- The loan request receives a “submitted” status with each selected lender, and the selected lenders are notified via email that they have received a new proposal.
- Within 48 hours, each lender should log in to his or her Lendicom account, examine the loan details, and decide whether s/he wants to get more information, or decline it.
- If the lender declines the proposal, a notice to that effect is sent to the borrower/broker. The borrower/broker may then search more new matches and submit the loan to a different matching lender.
- If the lender chooses to follow up, a notice to that effect is sent to the borrower/broker and the loan is given an “In process” status with that lender.
- Now, at this point, the lender must use the contact information provided in the loan proposal to contact the broker or borrower with whatever questions and/or requests for additional information.
If lenders don’t respond, there are two possible points in the above process this might happen:
First, the lender might never view the loan proposal details – might never choose to follow up or decline the loan. To guard against such cases, we have instituted the following policy: Each night we check all open loan requests. If a particular loan request was submitted 10 days or more previously, we decline the loan on behalf of the lender, and send a notice to this effect to both the borrower/broker and the lender. The borrower/broker is then able to submit his or her request to an additional matching lender.
Now, every loan proposal a lender receives, which s/he does not respond to within 4 days, counts against that lender’s LES (Lender Effectiveness Score). For details on that score, see my previous post. Here I’ll just repeat that borrowers and brokers should pay attention to lender’s LESs: a lender with a low score is essentially a lender who has had problems responding in a timely manner within the last 4 months.
Second, the lender might click “follow up”, triggering the notice to the borrower/broker that the lender is “interested” in the proposal, but never actually contact the broker or borrower for more information. Now, we don’t have – and wouldn’t want – a way to monitor whether the lender emailed or called the broker or borrower once the lender has the contact information. So we encourage brokers and borrowers to take the following to heart: “If the lender does not contact you within 24 to 48 hours, please contact us”. That’s in every notice we send out saying that a particular lender is interested in a borrower’s or broker’s proposal. We mean it!
That’s a rundown of how this aspect of the application works and our current policies, and is plenty for now. There are some important, broader considerations concerning the character and intentions of our service; but I’ll address those next week.
As always, we encourage you to send us your thoughts. You can reach us any time at firstname.lastname@example.org