Establishing Best Practices for Mortgage Brokers

The nature of a given commercial mortgage broker’s business isn’t set in stone. One may specialize in marketing technology products, whilst another may focus on improving their customers’ convenience or pricing. There is, however, one key underlying trait that virtually all prosperous mortgage brokers seem to have in common: they deliver consistent, high-quality services to their clientele. It is essential for commercial mortgage brokers to create and abide by an established code of conduct that operates as a corporate moral compass. The optimal method to do so is by adopting a core tenet of best practices in the day-to-day operations of the firm.

It’s easy for a mortgage broker to assume they are offering their customers with high-end services when in fact they are well below that standard. This is a concerning misassumption that can negatively impact the broker’s long-term success. From an ethical perspective, a licensed broker owes a fiduciary duty to their borrowers and lenders to operate competently. Conversely, from a business standpoint, a mortgage broker has to convincingly show why a potential customer should trust them with their hard-earned money by delivering consistently outstanding service.

In an industry where no two scenarios are ever exactly identical, the issue brokers face is how to adapt ‘on-the-fly’ so to speak in order to provide ideal service. While the unique circumstances of each financial transaction mean it’s virtually impossible to implement a clear-cut formula applicable to every situation, it is possible to develop a reliable decision-making model to guide a broker’s conduct by establishing a set of best practices to fall back on.

What exactly comprises a solid best practices framework? While the particulars will vary based on a firm’s specific niche, the following core principles are paramount when setting up these corporate guidelines.

Confidentiality is key. It is imperative for mortgage brokers to implement a stringent practice of maintaining client confidentiality in all aspects of their business in order to keep their customers’ sensitive information safe from inadvertent disclosure and theft. Nothing will drive off potential clients faster than a broker having a track record of leaking information entrusted to them.

Along the same vein, as part of the fiduciary relationship between broker and client, the broker is obligated to display accountability to all parties involved in a given transaction by completing all the necessary duties in a professional and competent manner. This includes displaying reasonable care to avert any actions that could potentially cause harm to the broker’s client and remaining loyal in protecting and promoting their interests.

An exemplary mortgage broker is obedient in that they faithfully abide by their clients’ directives in an ethical and legal manner—going above and beyond to accomplish the goals articulated by their customers. This duty of obedience, however, must remain within reason—meaning it cannot be allowed to interfere with a broker’s obligation to fully disclose the material facts related to a transaction to all involved parties regardless of whether doing so will negatively impact their client in the short-term. Transparency is both a moral and legal imperative and treating all parties in an equitable and professional manner will pay dividends in the future by keeping brokers out of legal trouble and establishing a trustworthy reputation.

Incorporating the aforementioned best practices in all aspects of daily business conduct is an indispensable component of providing clients with optimal service. The financial industry, however, is inherently unpredictable. Change is constant, and it dramatically impacts customer experience. In addition to constantly keeping abreast of industry developments and operating within the parameters of their given market specialty, brokers can set themselves apart from the competition by adopting and maintaining best practices.

Brokers typically enact changes in an attempt to increase profits and ramp up market share. Corporations routinely roll out new approaches, conduct in-depth analytics and use performance indicators to improve efficiency. These alterations at the corporate level can affect customer experience significantly. Without a baseline set of best practices that enables these changes to imbed themselves into the corporate culture seamlessly, a brokerage can lose its long-term outlook amidst the myriad of changes made in the name of improvement.