Imagine that you’re advising the 60-year-old wife of a much revered national political leader who also happens to be a billionaire. Unfortunately, their 30-year marriage is dissolving, but that will remain secret until her husband’s re-election campaign ends in two months. She has found a new home and wants to obtain a mortgage and close on it now, before the tabloids find out.
You and she have a relationship with a private banker, but you are unsure whether the bank’s retail mortgage division offers the flexibility and privacy that your client will need. Where can she find a team who will handle every nuance of the financing and closing process, quickly, impeccably and discreetly?
Mortgage lenders and their industry service partners, such as title search and appraisal management firms, have created special groups that cater to the unique requirements of borrowers like her. There is a very practical reason for this; these ultra-high-net-worth borrowers can become their most valuable clients, since mortgage assets are an important part of their portfolios.
However, these teams must carefully tune their operations and staffing to clients’ more exacting expectations. Every experience they deliver must be flawlessly curated.
Delivering a Superlative Experience
That’s a promise that’s become even more important given the nature of today’s mortgage lending process, which is complex and cumbersome. Some portions are particularly fraught with roadblocks and slowdowns. For example, title searches, along with any necessary curative, can take a week or longer. Moreover, in this active purchase, refinance and fix-and-flip market, a backlog of appraisal requests are often forcing lenders to factor in extra time before closing (while still meeting deadlines, of course).
Given these pressures, it would be natural for mortgage lenders to adopt a cookie-cutter, “wait in line” mentality. Instead, many are differentiating themselves by making each borrower feel like their only client — particularly in the ultra-high net worth category.
They’re doing this by putting themselves in these borrowers’ shoes. Imagine you are working with a 65-year-old company leader from Chicago who is positioning her firm for an IPO. In the midst of an all-consuming schedule, she is closing on a luxury condominium in Manhattan, and has delegated most of the transaction details to her attorney.
As you seek the right lenders to help this executive and the political leader’s wife, you’ll want to assess their teams’ and partners. Here is what to look for:
Flexibility and availability. Specialized high-net-worth teams and their industry partners have staff who are happily available, 24/7. Getting onto a phone call or flying to meet a client at a moment’s notice are part of the job for them — including late night flights to American embassies or consulates anywhere in the world.
Transparency and reliability. These teams will never subject clients to a two-week delay due to title-related issues, or emails that sit unanswered. They will clearly communicate every nuance or unexpected roadblock; share progress, plans and schedules; and preempt any factors that could lead to broken promises.
Demeanor and discretion. The appearance and demeanor of ultra-high-net-worth lending teams is highly professional. Lenders’ title agencies will hand select their closing agents for these assignments, and pay them more given heightened expectations. Appraisal management firms will compensate their appraisers immediately (counter to the usual interval of days or weeks) to ensure that their people prioritize this work.
Privacy and security. What if a 68-year-old client, who heads a successful household-name company, plans to retire and move to a different part of the country? Making his plans public prematurely could influence his company’s value. Ultra-high-net-worth lenders and their partners have appropriate processes in place to manage this kind of risk. On the title search and settlement side, they’ll keep documents in a secure server, and only those specialists assigned to it will have the password. All recordable documents will be scanned for mentions of client identity, and if appropriate, the team will discuss anonymity options such as trusts and LLCs. If names must appear in writing, then team members will work with county recording offices to prevent their disclosure.
Experience and expertise. Given that homebuying for the ultra-high-net-worth has both lifestyle and wealth management implications, every change may have a ripple effect. These changes may involve or lead to cross collateralizations; several simultaneous closings; international POAs; and formation/adaptation of trusts, LLCs and FLPs. The teams who are handling them must be up to the task.
Valuations will also require extra care. Consider a client who is buying a luxury property on a remote island, with an airstrip that can accommodate a large commercial jet. A cookie-cutter appraisal is out of the question. Each appraisal inspection will require up to half a day, versus the “usual” two hours or so. Once valuations are finalized, these documents will be delivered speedily (within one day) to keep the process moving.
When advisors look carefully for lenders who provide this exceptional level of service, they’re helping both their ultra-high-net-worth clients and themselves. Extra due diligence will help them continually improve their book of business, unlocking the doors to new growth from highly satisfied private wealth clients who appreciate their exceptional care.
Steve Ferringer is an executive vice president at Incenter, where he helps C-level mortgage executives identify performance opportunities for their enterprises. Incenter’s family of companies offer solutions to optimize lending, servicing or investing, including title search and settlement, title insurance, appraisals, MSR (mortgage servicing rights) valuation and trading, and more. Contact him at email@example.com or see incenterms.com.