Learn about the technology provided with RCN Capital’s Correspondent Program and how it is used to protect brokers/lenders who partner with RCN. 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:
How do you address the concern by brokers/lenders about RCN Capital having a retail channel? And how do you protect the brokers?
JEFF TESCH:
So as a wholesale lender, and that’s really what RCN Capital is, we have a retail component, but it’s a small component of what we do. We take very seriously both the brokerage and the correspondent lenders side of the relationship. We take it so seriously that we ended up building our own software to make sure that this process was controlled. And the reason that’s important, Rocky, is flashback to 2013 when we’re still running the company off of spreadsheets. And we really started to figure out that the wholesale model, third party origination for our friends in the residential world was going to be the model that we were going to use, meaning we weren’t going to hire loan officers all over the country. We were instead going to put our efforts into building out infrastructure that would support independent mortgage originators that were already in every community across the nation.
Most of these folks weren’t doing commercial loans. Most of these folks were doing residential loans. Over the past eight or nine years, all of our efforts have gone into building out infrastructure that supports them. And that started with the technology to make absolutely sure, number one, that they had the power to be able to communicate with us seamlessly. But number two, that we had total control over that relationship with the customer, meaning the customer can’t circumvent a broker. They can’t call up our 1-800 number and say, “Hey, I’d like a loan.” It will get flagged if they are previously attached to the broker. And then we will let nicely let them know “you’re associated with a broker and you will go back to that broker” or correspondent lender. Rocky, it’s so important. It’s one of the biggest caveats that we’ve always had at RCN, which is put the third party originator first. And we’re really proud of what we’ve done.
ROCKY BUTANI:
So tell us about this technology platform. What’s it called? How do I access it? And what else does it do for me as a broker?
JEFF TESCH:
So once again, back in 2013, we were running the company off of spreadsheets, like every other startup. And what we realized was, in the residential world, most of the existing loan operating systems did not work for what we did as a private lender. Encompass, Calyx, the list goes on and on of all these wonderful software solutions, but they’re built for Fannie, Freddie, FHA loans, not for private lending. So we embarked on what has been a almost 10-year journey now of building out our proprietary software. And what we figured out as we’ve been working on this, and we branded it several years ago Bridge Loan Network (BLN), is that if we take this tool that we run RCN on and we provide that tool to our correspondent and broker partners, they will exponentially build their business faster, which in turn will allow us to fund more loans with our broker and correspondent partners.
And we’ll give them the certainty that they’re actually building something that’s scalable. In business, anything that’s worth doing is worth doing if you can scale it, whether you’re selling sandwiches on Main Street or building software. You want to be able to scale it. And this tool that we built for ourselves about four or five years ago, we just started providing it to our partners. And the growth has been exponential. It’s really been something to watch. And because we built it as a lender, not as a software guru, it’s so good. It’s just so good.
ROCKY BUTANI:
And is this technology platform the way I would submit deals to you as a correspondent?
JEFF TESCH:
Yes, So there’s a couple things you can do with it. One, you can run your pipeline on it, same way RCN does internally. Number two, it’s going to allow you to communicate with us seamlessly and provide white label capacity if you want to use that to your customer directly and have them upload documents. It’s really a full service solution for building out that customer relationship. As the correspondent grows, they run into all the same problems we did back in the day. How do I handle more customers? How do I know where my loans are? How do I get them funded? The BLN solution does all that because it tracks all the documents and puts them into compartments that you’re working with your correspondent partner to be able to fund.
ROCKY BUTANI:
Can I use Bridge Loan Network for other deals that I’m not going to submit to RCN?
JEFF TESCH:
That is correct. And once again, there is a wall between, so we’re not mining data out of BLN, out of our correspondents. And let me say that again, we don’t mine data out of there. Your customers are your customers. We didn’t build a third party origination company to not do ethical things. So at the end of the day, your data’s your data, you keep control of that. And at the end of the day, if you decide to use BLN to run your business on, which we encourage, you can take your loans and send them somewhere else.
ROCKY BUTANI:
In terms of submitting a deal, I put it into BLN, upload the documents, I can send a link to where the borrower can upload documents and add whatever information. Once I put the deal into BLN, do I just have to click a button to send it to RCN?
JEFF TESCH:
Yeah. So first off, it goes back to your human relationship at RCN. So whoever your correspondent partner is at RCN, you’re already going to be in touch whether or not that loan’s going to RCN. If it is going to RCN, then it’ll come over to our side, and then it’ll go through our underwriting process. From there, it goes to legal, we get out a term sheet, and away we go. If the partner chooses not to accept that term sheet, they can always pull it back and move it somewhere else.
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