Financial & Regulated Services · Buyer guide
Buying a Mortgage & Loan Brokerage business
Published · Reviewed by The Diligence Standard Team · Updated
a Mortgage & Loan Brokerage can look attractive on headline earnings while asset condition, regulation, customer behavior, inventory, people or owner dependence materially change what the buyer actually owns.
How the business works
Funded-loan volume, referral sources, loan officer production, licensing, lender relationships, compliance and rate-cycle sensitivity determine value.
Risks to test
- Licensing/change-of-control
- Rate-cycle sensitivity
- Top loan-officer dependence
- Referral-source concentration
- Compliance/repurchase exposure
- Lender relationship continuity
Evidence to request and reconcile
- Funded-loan history
- Pipeline/pull-through
- LO roster/compensation
- Licenses/compliance
- Referral source data
- Lender agreements
Decision questions
- Which licenses must remain?
- How concentrated are loan officers/referral partners?
- What compliance findings exist?
- How sensitive is volume to rates?
- Can lender relationships transfer?