The coronavirus outbreak— and the subsequent turbulence of the stock market—has revealed stark differences between private lenders’ customer service models:
- There are hard money lenders that rely on Wall Street to buy loans they have placed on a warehouse line. They treat loans as transactions.
- And, there are lenders that have used their own balance sheet to fund loans. They treat loans as relationships.
Did your lender back out of your loan? Are you struggling to get them on the phone? Or get a straight answer to questions when you do? This is a sign your lender uses a transactional business model. This is also a sign that now is the time to find a hard money lender with a relationship business model.
“A lot of our competitors have said they’re relationship partners, and coronavirus was the end of that relationship.”
COVID-19 Reveals the Downfall of the Transactional Business Model
Private lenders with a transactional business model will tout both their customer service and the expedience of their capital, which they may deliver when Wall Street will buy up their loans. But what happens to customer service when the expedient capital goes the way of Wall Street’s fear? It evaporates and the very nature of a “relationship” evaporates with it.
In the words of Paul Jackson, Principal of Residential Capital Partners, “A lot of our competitors have said they’re relationship partners, and coronavirus was the end of that relationship. We want to be the lending partner of choice for our customers in good times and uncertain times.”
How Relationship-Oriented Private Lenders Help You Succeed
Relationship-oriented private lenders know the truth—that a lender’s success is contingent on that of their borrowers. In Paul’s words, “The relationship is the business. So, maintaining the same product offerings, the same customer service, and the same funding commitments despite the headwinds is when long-term relationships are forged.”
Residential Capital Partners has taken extra care to deliver unwavering support for our borrowers during coronavirus. One such example came when Nadia Dixon, Repair Draw & Servicing Manager for Residential Capital Partners, helped a client troubleshoot technical difficulties from afar on a rehab loan.
“The relationship is the business.”
Maureen DelSol, a Residential Capital Partners client, needed assistance logging into our new online portal to access her account. Not only did Nadia walk her through the process of resetting her password and the repair draw submission process, but she also followed up with an email detailing the process step-by-step for the next time Ms. DelSol needed to submit a repair draw.
Maureen was so thankful for this proactive and helpful gesture that she wrote Residential Capital Partners a letter to acknowledge the “superb and great services that Nadia Dixon had given [her] and [her] staff.”
We’re Proud to Be the Nadia Dixons of Private Lending
At a time when it’s hard to get many lenders on the phone, having a lender that’s not only in business, but prioritizing your success is critical.
Paul Jackson states, “With all the uncertainty surrounding [COVID-19], our hope is that our new and old customers will remember who was there for them.”
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