In a continued effort to provide superior customer service and product updates to our clients we launched our Broker User Survey earlier in the year to gain a greater insight into how we are doing.
Many of our survey results highlighted the need to focus training on the services we offer in our software, including the ability to run a background check on a borrower powered by LexusNexus.
Background checks on borrowers are an important step in many, if not all, private or hard money lending transactions. *
Lenders require background checks to gain a better understanding of the borrower and their likelihood of repaying the loan. In certain situations, a background check can make or break the loan.
The typical red flags lenders will be looking for in a background check are any real estate delinquencies such as missed mortgage payments, defaults, or foreclosures. This is one of the most important items lenders will look into on a background check and can be the hard-determining factor to pass on giving a loan. Lenders will also look at any judgments or tax liens and fraud, criminal activity or serious felonies reported. Depending on the lender, there may be other items that can be deemed as a red flag, but lenders will always specify the problem when declining to continue with the loan scenario.
With that being said, if you have a client that has any of these red flags come up on a background report, be upfront with your lender and talk through the different paths to getting the deal funded. In some cases, lenders will be able to make an exception on certain occurrences.
As a user of Bridge Loan Network, Brokers and Lenders can run background reports on borrowers similarly to running a credit check. The background report will be stored in the Bridge Loan Network system and attached to the borrower for 90 days.
*Our team at Bridge Loan Network has lenders in our network that can provide loans with no credit or background check. If you have a client that you think may have a problem with either aspect, ask our team about our no document lenders.
