Ranking Commercial Lender Search Results
Lendicom.com’s core function is to provide commercial mortgage brokers and borrowers with a list of loan programs from multiple lenders, closely matched to the financing requests the brokers or borrowers have created. The broker or borrower can then select up to four lenders, to whom the profile of the financing request will be sent.
Lendicom is not a brokerage: strictly, therefore, it is not our role to counsel brokers and borrowers on the merits of certain lenders. Rather, Lendicom is simply a virtual marketplace, in which commercial lenders, brokers and borrowers can interact efficiently. However, we do aim to provide our users with effective tools for negotiating this interaction; and whereas we can’t counsel users on the merits of other users outside of the network, in the big wide world of commercial lending, we can and do provide brokers and borrowers with information about lenders’ performance within our network.
When a broker or borrower is looking at the list of lenders whose programs match the broker or borrower’s loan request, the most prominent statistic is the “Lender Effectiveness Score”. This score is intended as a general indicator of a lender’s effectiveness within the Lendicom network.
Lender effectiveness is measured by three criteria:
- Responsiveness
- End performance
- Information Accuracy
Every lender starts out with a score of 100. This is the “neutral” score, which is adjusted up or down depending on the above factors.
Responsiveness: A lender’s score suffers to the extent that the lender does not follow up with loan requests promptly. Specifically, the percentage of proposals the lender received during the previous 120 days, to which the lender did not respond within 3 days of receipt, is subtracted from the neutral score.
For instance, if a lender has received 50 loan proposals over the past 120 days, and it took longer than 3 days for the lender to respond to 25 of those proposals, the lender’s score would be reduced by 50%, yielding a final Lender Effectiveness score of 50.
End performance: A lender's score is improved as s/he is effective from the broad perspective of closing loans; that’s what it’s all about, in the end. Specifically, a set number of points is added to the Lender Effectiveness According to the following schedule:
No. of Loans Closed Score Increase 1 5 2-10 10 11-20 15 21-30 20 30+ 25 Information Accuracy: Lenders are rewarded for defining their loan programs carefully so that the matches between them and brokers’ and borrowers’ loan proposals are accurate. For instance, if a lender defines a blanket program that allows for no minimum or maximum loan amounts, all property types, in all locations, etc., in order to gain as many matches as possible; but the lender can in fact only close a small fraction of those matches; this is something we discourage.
Specifically, the percentage of loan proposals received that were actually closed to is added to the Lender Effectiveness Score. For instance, if a lender has received 50 proposals and has closed 5 of them, his/her Lender Effectiveness Score would be increased by 10 points (5 being 10% of 50).