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Valentine's Day has arrived.
Along with that comes talk of relationships, including the broker-lender relationship.
The broker-lender union — whether that be traditional banks or alternative lenders — is perhaps one of the most important relationships for brokers as they navigate Australia's dynamic loan market. Brokers and lenders support each other in sourcing clients, gaining approvals, negotiating loan structures, making investment decisions and meeting settlement deadlines.
To create a working relationship, the duo needs to have patience, understanding of each other's perspectives and the willingness to compromise. When both sides work together in sync, they create a secure financial strategy for borrowers, as well as strengthening the stability of their own relationship and ensuring both partners feel supported in their shared journey.
But, like any couple, brokers and lenders face issues. The pair must work through financial hurdles together, from differing risk tolerances to complex terms and conditions.
In honour of Cupid’s Day, Australian Broker asked some of the best brokers and lenders Down Under for their advice on how to make the relationship work, their biggest pain points and what they can do to better work together in the future. The responses have been edited for clarity and length.
General manager distribution at Sydney-based non-bank lender Resimac
"I think a key point [to better working with brokers] is educating brokers. And we rely on our [business development managers] to do that. We rely on consistent communication around credit policy and how that policy can help the broker grow their business, so that they're not knocking back customers. And if they do have a customer that's quite complex, they can rely on support of a Resimac BDM, or a non-bank BDM, to really go in and unpack the scenario, look at the mitigants against the application and try and support the broker in the best product type, as opposed to knocking the customer back.
"[There could be a pain point] because there's so much competition and lenders may ask for different requirements on their products. So, from the outset, if it's a broker who's new to writing those types of products, it could be a bit of back and forth, because the broker is not aware. And that's where the BDM is so important. If the broker spends time with the BDM, getting a full understanding of what the transaction involves and what supporting documents are involved, so that an application can be considered with as little back and forth as possible, that's what we're trying to achieve. Digital functionality supports that too. There's tools and systems in the market, and NextGen is apply-online, and that helps with supporting document requirements too."
Founder, managing director and finance broker at Sydney-based brokerage Blue Crane Capital
"There's a lot [of pain points], but it goes both ways. I think having a really good lender BDM is very important to workshop the deal. If you've got an inexperienced BDM that doesn't understand their own policy, then it's very hard for us to act with confidence and provide recommendations to our clients. So it's really important that you have a strong relationship with an experienced BDM, with all the lenders.
"Also, turnaround times have definitely shortened, which is a good thing. In our industry, they're called [service level agreements], or turnaround time. So from submitting the transaction online to formal approval, in general, we've seen — when it was at its peak — sometimes two to three weeks to get an approval. Now it's only a couple of days, because I think there isn't that supply of transactions that are flowing through. But if you asked me that same question nine months ago, I would have said, the lenders are way too slow. Whereas now they've normalised and they've got more capacity and resourcing.
"The other pain point — and it depends on which lender you deal with — but if you submit a deal, it goes to one credit manager that asks for additional information, and then you've got to put it back into a queue. And [later] you might not get the same credit manager. So it just depends on how each lender manages HDL."
Alissa ChildsCofounder and mortgage broker at New South Wales-based brokerage Two Birds One Loan
"We've got really good relationships with our lenders, especially in the residential space. The commercial space is a bit trickier, because you have a different banker, depending on where the client is located. If we have a [client], for example, in Western Australia, we have to, first of all, find bankers from all the major banks in WA. So it's different contacts for every single transaction. So that's a bit trickier. But in residential it's just having a really good BDM. As long as you've got someone that you can go to if you need help, who's willing to sort of jump in and get their hands dirty, which I'd say almost all of our mediums are like that. If something goes pear-shaped at a bank, it's good to know at least one person you can call for help. It pays to be well connected in this industry, across the banks."
Chief commercial officer at Sydney-based non-bank lender Bluestone Home Loans
"[Having a good relationship] is something really simple. It's just being available and responsive. It's the simple things, like answering the phone, or returning phone calls. But it's where a lot of lenders fall down. It's the biggest gripe that brokers have out there, that lenders are just poor at [being responsive.] And that would put Bluestone right up there: that we're available; we're accessible. And brokers are able to get access to the right people and the decision makers. That's a real point of differentiation for Bluestone."
Cofounder and co-chief executive officer at Sydney-based alternative lender MA Financial 
"[The biggest pain point] is speed and efficiency. Brokers don't want to let their clients down. They want to get the best possible outcome for them, and they want to be able to do it promptly. Especially because the real estate market is quite a fast moving market and you're often in situations in real estate where you need certainty. You need certainty to buy. And you see the asset class move quite quickly.
"So getting that certainty. Because real estate opportunities come up, the property is there and we all know how hard it is to buy a home. And everyone's dream is, they want that home. It's a very emotional asset class. And brokers want to partner with a lender, where they know it's good rates, good policy and fast turnaround times. So that when their client wants to have their dream home and move in, the broker knows that they've got the confidence to put an offer on a property and that they'll get their funding. And so it's speed and transparency on turnaround times, those are right up there as being really important. And then it goes to how flexible the policy is, because every borrower is different. Every borrower has slightly different circumstances. And every borrower, as well, might see their circumstances change and pivot. So you want to make sure that you have a home loan that's capable of having that same degree of flexibility around your policies."
