New York – Top-ten commercial mortgage brokerage firm Eastern Union Funding, one of the fastest growing in the nation and a pioneer of capped-fee loan origination, announced today that it will be adjusting its fee cap to $135,000 on loans for stabilized properties, effective immediately on new originations.
The decision results from the firm’s success in the year since its president, Ira Zlotowitz, sent shock waves through the industry by rolling out a fee cap of $250,000 per transaction—making Eastern Union the first debt brokerage to offer a solution to the problem of exorbitant industry fees.
In the 12 months since the rollout of the $250,000 cap, business has more than doubled, with Eastern Union Funding closing 100 deals above $10 million.
“Not only did we pick up deals above $25 million, which directly benefited from the cap because the industry typically pays one percent of $25 million, but we also saw a surge in the $10 million to north of $50 million loans,” said Eastern Union President Ira Zlotowitz. “Clients are choosing to grow with Eastern, knowing that not only are they receiving best-in-class service; but as they get bigger, the fees on their larger loans will be capped.”
“We grew to $3 billion a year based on being trusted advisors, coupled with our certainty of execution,” said Michael Muller, Eastern Union Senior Managing Director and the top originator at Eastern Union Funding for the last decade. “We are now taking that trust to a whole new level. We truly feel that, in today’s market, advances in technology and data points warrant a new fee structure. We are now able to offer a cap of $135K, which we feel is in line with the progression of the market.
The company’s top producer also alluded to further changes in the company’s fee structure: “We are continuing to innovate, and are in the process of developing another industry-revolutionizing refinancing product to be rolled out by the end of the third quarter that will truly transform the CRE financing arena.”
“Our goal from the start has always been to foster efficiency in the marketplace. Borrowers have questioned for years why a $100 million deal warrants a fee five times the size of a $20 million deaI, and why a $20 million deal carries a fee four times that of a $5 million dollar transaction,” Zlotowitz said. “It doesn’t make sense. If anything, it’s easier for large deals. They are more appealing to lenders. We are confronting this issue directly and offering a value-added, fair fee for a service we know is top quality and inspires loyalty.”
About Eastern Union Funding: Founded in 2001, Eastern Union Funding is a top 10 commercial mortgage brokerage, according to Mortgage Bankers Association’s annual survey. Eastern Union’s sophisticated and reliable debt solutions are built on a foundation of trust, and complemented by a one-of-a-kind Equity Division. As reported by Crain’s New York, Eastern Union is one of the top 50 fastest growing companies in NYC. Closing an average of $3 billion in annual transaction volume nationwide, Eastern Union is headquartered in New York, with offices in New Jersey, Maryland and Israel. For more on the country’s most trusted commercial mortgage brokerage visit www.easternuc.com.