Get an overview of RCN Capital’s Correspondent Program. Private Lender Link’s CEO, Rocky Butani visited RCN Capital’s office in Connecticut in January 2023 to interview the company’s CEO, Jeffrey Tesch. Watch the video or read the transcript below.
ROCKY BUTANI:
Could you tell us more about RCN Capital’s Correspondent Program?
JEFF TESCH:
So the Correspondent Program is designed to help the brokers build their business. And what that means is brokers are often working off spreadsheets and very minimal labor. What we’ve done is we’ve created an entire package that will support them with technology, infrastructure, and most importantly capital to help them build their business. And all of this is designed for the broker to build their own brand with RCN support in the background, helping them do just that.
ROCKY BUTANI:
What are your requirements for them to be able to take advantage of your program?
JEFF TESCH:
So we run a simple credit and background check, making sure that they have minimum standards. We also like to see a tape of loans that they’ve done in the past. We’re not looking for deep experience here, we’re looking for somebody that’s been in the business for at least a year, that’s slowly but surely building their business, and is really ready to take it to the next level.
ROCKY BUTANI:
So if I’m a consumer mortgage broker and I want to start originating loans that are focused for real estate investment, I could use RCN as a source for that, but could you tell me how it’s structured? Am I just brokering the loans to RCN? How does your program work if I’m signed up with you as a broker?
JEFF TESCH:
So the broker program is super simple, right we sign you up as a broker. The key to that is once we sign you up you begin an intensive training program on all of our different lending programs. That intensive training program includes you being assigned a direct contact at RCN Capital that is incentivized to help you build your business. The more loans you close as a broker, the more money our internal counterpart makes. And something we’re really proud of, Rocky, is the Amplify Training Program. This is a self-directed software solution for brokers that are coming into this commercial lending space and really know nothing about it, not only for themselves, but for their employees. It’s all free to brokers. The reason I say it’s self-directed, because it’s a software solution they’re able to do it nights, weekends, whenever they have time to be able to build out their education. They log on and they go all the way from beginner to intermediary, and then eventually you become an expert through that Amplify Training Program. We’re so proud of what we’ve built.
ROCKY BUTANI:
You used the word “correspondent” to describe this program. What do you mean by correspondent and how it’s structured? Because there’s some other companies out there that have a program called “White Label” or “Table Funding.”
JEFF TESCH:
So the way RCN looks at a correspondent relationship is you are a more sophisticated lender. You’ve been doing this for a while, and you’re ready to really take that next step in building out your brand. Brokers, they’re not building out their brand. Correspondent lenders are building out their own brand. Once they’re ready to take that step, we allow those three pillars once again, all of the technology, all the human infrastructure, and all of the financing, for the correspondents to build. But what makes it different is we are closing in a third party entity that is generic, which allows the broker to be able to claim their funding the loan, and that is in a correspondent capacity. This is the real game changer for those lenders that take that next step to the correspondent process because now they’re building their own brand, not somebody else they’re just brokering a loan to.
ROCKY BUTANI:
So if I’m a broker using RCN Capital’s Correspondent Program, the borrower’s not really going to know about RCN, at least initially, right? RCN is kind of in the background?
JEFF TESCH:
And that’s through the life of the loan. So one of the things that we’ve done here at RCN Capital is we have built a complete white label transparency for that correspondent, so that means when we close the loan the broker/correspondent lender is seen as closing the loan. There is no at closing letting the customer know where the money’s provided from. It is completely white-labeled, it’s in the background. And most importantly, once the loan closes and it begins to beget service, that servicing on a bridge lending side is controlled by our own third party servicer that RCN Capital owns. So once again the correspondent lenders working with RCN’s completely white labeled servicing department. And that’s key because as the life of the loan goes on the relationship continues for the correspondent lender. And then if it’s on a 30-year side, the debt service just goes off to a traditional rated servicing company over the life of the loan. And that can be sold multiple times, just like in residential loans.
Next:
The Economics of a Private Lending Correspondent Program
Protecting and Enabling Brokers’ Success with Technology