Hybrid TPO Relationships

HYBRID TPO

FAQS

What is a TPO?

Who is a potential hybrid-TPO client?

How do you recognize potential hybrid-TPO relationships?

What are good qualifiers for potential hybrid-TPO clients?

Who is the right person to help me make hybridTPO client in-roads?

I have an interested TPO client - now what?

Who is involved in recruiting a hybrid-TPO?

What is the process of signing up a hybrid-TPO?

WHERE TO BEGIN WITH HYBRID TPO

Looking to up your gains by taking on a TPO? We’re here for it.

Taking on a hybrid-TPO relationship is a great way to build your business with Stockton Mortgage As you look to your local community banks and credit unions for potential partnerships, it’s important to note that in addition to your efforts in striking up a relationship with the potential hybrid-TPO, you’re backed by many teams at Stockton

Several departments at Stockton collaborate closely in the process of attracting and onboarding a new hybridTPO client Our teams work closely together to make sure that you – and your client – are supported every step of the way.

The purpose of this guide is to help you understand the key components for identifying and propositioning prospects, the TPO application process to due diligence, setup, and onboarding

Grasping these procedures will help you initiate and navigate knowledgeable conversations with potential hybrid-TPOs and assure them that with Stockton Mortgage, they’re in capable hands

�� Pro-tip: As our processes evolve, so will this guide Bookmark the link to this guide in your web browser so you’re always current on the processes of onboarding a hybrid-TPO client.

BUT FIRST: WHAT’S, WHO’S, & HOW’S

What is TPO?

TPO stands for Third Party Origination. Non-delegated Third-Party Origination (TPO) lending involves a partnership between the original lender or mortgage originator and third-party entities

In the hybrid TPO model, your TPO client is the originating company and we are the ultimate lender

This model defines how the process from application to underwriting responsibilities are shared between the parties involved.

How is TPO different from a referral?

A TPO relationship is not a direct referral of a customer, rather a TPO relationship is strictly with a depository institution. They (the depository institution) handle all the direct communication with the borrowers and we (Stockton Mortgage) communicate only with the depository institution.

Who is a potential client?

Non-Delegated TPO Lending: In the Nondelegated model, the TPO (the bank or CU) takes the application, issues the preapproval letter, and may do some processing However, the lender (you/Stockton) handles the underwriting and approval of the loan.

Non-Delegated TPO lending is what we offer here at Stockton Mortgage per our hybrid-TPO model

Very simply: potential hybrid-TPO clients consist of other, typically smaller, community-type financial institutions (banks, credit unions). There’s more on identifying potential TPO clients and gauging the comfortability level with your contact a bit later.

How do you recognize potential?

Pinpointing financial institutions that would make great partners in a TPO relationship requires consideration and strategy before jumping headlong into a sales pitch with FIstakeholders. Here are a few things to consider as you embark on identifying those relationships.

Criteria for Identifying TPO Prospects

BANKS OR CREDIT UNIONS THAT REFER BORROWERS BECAUSE THE BORROWERS DON’T QUALIFY FOR THE FINANCIAL INSTITUTIONS’ MORTGAGE PRODUCTS

BANKS OR CUS WHO YOU THINK WOULD MAKE A GOOD TPO PARTNERS

BANKS OR CUS WHO ARE NOT ABLE TO OFFER SPECIFIC MORTGAGE PRODUCTS BUT WOULD LIKE TO OFFER THEM

BANKS OR CUS WITHOUT AN UNDERSTANDING OF SPECIFIC MORTGAGE PRODUCTS AND WHO WOULD OFFER THEM IF THERE WAS A BETTER UNDERSTANDING OF THESE PRODUCTS

CONTACTS WITHIN THE BANKS OR CUS OR OTHERS WHO COULD INTRODUCE YOU TO THE APPROPRIATE PARTIES AT THE BANK/CU

SPECIFIC LOAN OFFICERS AT BANKS/CUS WHO WOULD MAKE GOOD TPO PARTNERS

PLEASE NOTE THAT FOR OUR HYBRID-TPO MODEL, WE ONLY EXTEND HYBRID-TPO PARTNERSHIPS TO BANKS AND CREDIT UNIONS I E NO MORTGAGE BROKERAGES

Step 1: Evaluate Your Relationship

Do you have a contact who works within a Financial Institution that might help you form a TPO relationship? Please note, if the contact you have isn’t a decisionmaker or stakeholder there – don’t discount them That person could help you create inroads to gaining an audience with the decision-making parties.

Who is your contact & what’s your comfort level?

Consider your comfort level with both your contact and familiarity with Stockton’s TPO offerings - and ask yourself these questions:

Is your contact the decision maker?

Maybe you’ve struck up a friendship with a bank President, senior leader, or fellow mortgage banker. Consider who you know and how you could approach them and the relevant stakeholders for discussing TPO relationships

How comfortable are you with your professional contact?

Maybe you’re super comfortable with an individual that’s willing to talk TPO, but you’re not comfortable answering all the questions Maybe you’re only lukewarm in your professional relationship with the individual and you’d feel better with a wingman to ease any discomfort. Maybe your contact is your bestie and you’re prepared to fly solo through the initial steps We’re prepared to support you through all the above

How comfortable are you with leading the introductory/discovery hybrid-TPO conversation?

If you’re feeling confident that you understand Stockton’s hybrid-TPO practices (the products offered specific to hybrid-TPO, vetting processes) you might feel great making the initial call solo

If you you’re not comfortable going it alone, no worries. Our designated Corporate (Support Team) is happy to help you navigate the first and subsequent conversations.

Keep reading to get a feel for gauging your comfortability levels for tagging in the Support Team when necessary, and exactly what these conversations entail!

Relationship Strength Actions

BASED ON R’SHIP STRENGTH, COMPLETE THE STEPS SOLO, WITH BACK UP, OR SKIP ALTOGETHER

*INITIAL CALL (SOLO)

ASKING TO CONNECT W/MORTGAGE CONTACT

ASKING TO CONNECT W/MORTGAGE CONTACT X

*INITIAL CALL (W/MANAGER)

DISCOVERY & INTRO (SOLO)

DISCOVERY & INTRO (W/MANAGER)

NDA/BROKER AGREEMENT (SOLO) X THE PITCH (MEETING W/DECISION MAKERS SOLO) X

THE PITCH (MEETING W/DECISION MAKERS & STOCKTON LEADERSHIP) X X X APPLICATION SUBMISSION (W/LEADERSHIP) X X X

NDA/BROKER AGREEMENT (W/LEADERSHIP) GOOD BETTER BEST X X X X X X X

*ONLY NECESSARY IF CONTACT ISN’T ASSOCIATED WITH MORTGAGE, CAN’T SPEAK TO MORTGAGE OPPS GOOD = CASUAL ACQUAINTANCE, FRIENDS ON FB, NOD AT THE GROCERY STORE BETTER = PROFESSIONAL ACQUAINTANCE, FRIENDS IRL, YOU’VE GOT THEIR CELL DIGITS BEST = PROFESSIONAL BESTIES, YOU GO WAY BACK, 10/10 WOULD DANCE AT THEIR DAUGHTER’S WEDDING ���� PLEASE NOTE: EVEN IF YOUR RELATIONSHIP STRENGTH IS DETERMINED AS “BEST“, BE SURE YOU’RE COMFORTABLE IN YOUR UNDERSTANDING OF STOCKTON’S HYBRID-TPO PRACTICES, PROCESSES, AND PRODUCTS BEFORE YOU GO IT ALONE!

INITIAL CALL

Step 1 ½ : Find the Decision Maker

You’ve got a good feeling about your buddy over at XYZ Bank Buuuuut he’s the Teller Supervisor

We stressed the importance of rating your comfortability level with your contact - but equally important is knowing how to leverage that relationship effectively If your contact isn't the decision-maker for mortgage lending, you might need to arrange a preliminary call before reaching out to the main decision-makers

This initial conversation is crucial for 'kicking the tires' you can gauge interest by asking, "Is this something you think your financial institution would be interested in?”, “Can you connect me with the right person?"

Think of it as the call before the call, setting the stage for a more focused and productive discussion with the key decision-makers

DISCOVERY/INTRO MEETING

Step 2: Discovery & Intro Meeting

You’ve identified a potential TPO client, made in-roads to a decision maker, and you’ve got a meeting on the books - don’t get to work drafting your pitch just yet! It’s time to dig into the unique needs of your TPO.

This is a necessary step that will enable you to develop a value proposition tailored to your prospect's interests and position yourself (backed by Stockton Mortgage) as the solution to the FI’s mortgage lending hang-ups

You may wish to include your Branch Manager on the initial meeting with the TPO based on your comfort-level (see the relationship comfortability chart) This tagteam approach is designed to provide you a solid back up, such that as dialogue starts to flow, you’ll have help fielding questions while also gathering valuable insights into your potential TPO’s needs

Treat this call as you would any retail customer. You’re getting to know them, you want to understand their objectives and hear about their challenges, so you can circle back to them with a customtailored solution that will help them reach their goals.

��⚡ PRO TIP: INVOLVING UPPER MANAGEMENT OR AN EXECUTIVE IN YOUR MEETINGS CAN MAKE YOUR STAKEHOLDERS FEEL VALUED, AS IT DEMONSTRATES THAT YOU ARE DEDICATING SIGNIFICANT RESOURCES TO PRIORITIZE THEIR TIME AND THIS OPPORTUNITY.

Some Questions You’ll Want to Ask

Do you have a mortgage department?

How many LO/Operations Personnel do you have?

Do you do secondary market mortgages?

How do you handle the execution of your secondary market mortgages?

Do you only do in-house?

Does the bank have best practices or pain points when it comes to internal mortgage origination?

���� Listen for: “We only do portfolio loans”, “we don’t offer secondary market loans”, and “we only do conventional / no government loans”. This usually means this FI is a great candidate for becoming a hybrid-TPO client.

Go Beyond Barbara Walters

Before the meeting concludes, be sure you’ve met your objectives for plugging Stockton, fact finding, and making plans for the next 1:1. Stay on task - peep the Discovery Objectives!

Discovery Meeting Objectives

EMPHASIZE THAT A STOCKTON TPO RELATIONSHIP AND HOW STOCKTON’S MORTGAGE PRODUCTS CAN ASSIST THE BANK/CU WITH: - RETAINING CUSTOMERS - ATTRACTING NEW CUSTOMERS - INCREASING FEE INCOME

IDENTIFY OFFERED & UNOFFERED MORTGAGE PRODUCTS DESIRED BY THE PROSPECT AND ASSESS CUSTOMER/MEMBER DEMAND FOR THESE PRODUCTS

ASK ABOUT THE BANK/CU’S STRATEGIC GOALS FOR THE NEXT 1-5-10 YEARS

Tee Up the Next Meeting

EXPLAIN NEXT STEPS IN THE PROCESS*** NDA SIGNED***

ASK FOR SOME DATES/TIMES THAT APPROPRIATE STAKEHOLDERS WOULD BE AVAILABLE TO ATTEND A PRESENTATION BY STOCKTON CORPORATE SUPPORT TEAM

LET’S DO THIS!

SUBMIT THE FORM ON STOCKTON CONNECT TO ALERT THE CORPORATE SUPPORT TEAM THAT YOU’VE IDENTIFIED A PROMISING TPO CLIENT AND YOU’RE READY TO PITCH

RALLY THE TROOPS

Step 3: The Pitch

Based on the information gathered from the fact-finding meeting, we will work with you to craft a pitch that is tailored to address their needs, wishes, and wants, which we will then present to them – and help close the deal!

Please fill out the information form, ensuring your manager is (if they haven’t already been) looped in, and provide details about your TPO. Corporate Support Team will subsequently follow up.

Senior management will assist you in crafting a position that addresses their concerns and will help you in closing the deal.

It’s important to complete the form so the Corporate Support Team is in the loop, and can otherwise support you, address any questions you may have, and be sure client expectations are clearly set.

This helps to avoid promises that might lead to credibility issues and prevent setting the wrong expectations that could negatively impact the relationship from the start

Team will set aside time with you to review the info you’ve submitted, discuss the prospect more thoroughly, and talk through the game plan for delivering the pitch

On the day of the meeting, you and the Team will make the pitch and help you seal the deal!

(Optional: Everyone shares a round of high-fives before advancing to the next steps ����).

Either you or the Corporate Support Team will forward the TPO Application to you (to share with the potential-TPO) or send directly to designated individual, and briefly preface the app process.

APPROVAL PROCESS FOR HYBRID-TPO

Step 4: The Application Process

Now that you’ve got a hybrid-TPO client on the hook, it’s time to reel them in (officially). Review the flow chart that will illustrate how the TPO Application process unfolds, steps you’ll be tasked with, and how other departments at Stockton will play a role.

Third-Party Originator Approval Process

COMPLIANCE TO SEND TPO APPLICATION PACKAGE & BROKER AGREEMENT

APPLICANT TO COMPLETE SIGN DOCS & AGREEMENT; SEND TO LO NO

COMPLIANCE REACHES OUT TO LO; LO TO CONTACT APPLICANT AND REQUEST MISSING INFO OR DOCS

LO TO FOLLOW UP WITH APPLICANT; ADDRESS CONCERNS; KEEP LEADERSHIP UPDATED ON STATUS

FOLLOW UP

YES

COMPLIANCE TO CONDUCT DUE DILIGENCE

ANY ISSUE(S) DETECTED YES

COMPLIANCE REACHES OUT LO TO RESEARCH ISSUE(S) & RESOLVE IF POSSIBLE NO

COMPLIANCE TO PREPARE A SUMMARY OF THE REVIEW & PROVIDE TO PRESIDENT APPLICANT IS APPROVED / DENIED APPROVED

COMPLIANCE TO SEND TPO APPROVAL LETTER & COUNTERSIGNED BROKER AGREEMENT; LO CC D

COMPLIANCE TO CREATE TPO SHAREPOINT FILE & SAVE TPO DOCS; SEND TO IT & QC FOR SYSTEMS SET UP, INCORPORATE TPO S PRIVACY NOTICE & AB (IF ANY)

IT & QC TO MAKE APPROPRIATE CHANGES TO MORTGAGE LOS; NOTIFY COMPLIANCE CHANGES ARE IN PLACE

COMPLIANCE TO SEND APPLICANT DENIAL LETTER

LO TO CONNECT WITH TPO TEAM TO DISCUSS OFFICIAL ONBOARDING TRAINING FOR NEW TPO CLIENT ������

LO TO SEND APPLICANT WELCOME LETTER YOU DID IT!

TIME TO ONBOARD!