Before the pandemic, the role of a mortgage broker was often overlooked. Most borrowers had access to capital and CRE professionals typically did not have much need for mortgage brokers either as their buyers likely had a lender already lined up for a given transaction. Overall, getting a loan was rather straightforward. Now, however, CRE lending has dramatically changed and the role of a mortgage broker has changed with it:

• More guidance: with so many lenders still rejecting new deals or only lending on certain asset types or offering a specific product, mortgage brokers need to maintain continuous communication with a variety of lenders to provide the best service for their clients. For the borrowers that would typically work with a relationship bank for their commercial mortgage it is very possible that their bank will not finance their property now. Many borrowers are being forced to find new lending relationships, and a mortgage broker can help guide those borrowers to the right lender for whatever deal they are working on.
• Extra work: due to COVID, closing a loan now requires more work and a broker can help carry the load. Lenders want to see collections reports and delinquency reports, especially if tenants have missed rent payments. Rent rolls and profit & loss statements need to be continuously updated throughout the closing process. More detailed underwriting is often required along with comps to support the numbers. Mortgage brokers can help with all the extra due diligence and properly present the right information to the lender on behalf of the borrower.
• Creativity: today’s market often requires more creativity on the broker’s part. Sometimes this means finding small local lenders for deals in tertiary markets – a local credit union or a small regional bank. Other times it means structuring a deal differently to achieve the borrower’s goals while keeping the lender comfortable – maybe getting a line of credit instead of cash out for a refinance.
• Closing: providing certainty of close is paramount in today’s market. Too many buyers have backed out of deals due to financing falling through, and too many CRE brokers are having transactions fall apart as a result. It falls on the mortgage broker to line up a lender that will perform. A real estate broker that can bring in a good mortgage broker can provide extra service for their clients and can boost their chances of closing transactions in this environment. 

With the information that mortgage brokers receive daily and weekly from lenders, colleagues, and other professionals in the CRE finance world, and these new roles and responsibilities that have arisen since the pandemic, mortgage brokers have an opportunity provide more value to clients and other CRE professionals alike.