Improving Mortgage Sales and Operations Through Data

BLOG VIEW: Although there has been a great deal of progress made in modernizing the mortgage industry, the fundamental idea of a mortgage and what a loan officer does is much the same as in years past.

Where lenders have made great strides is in improving how mortgage professionals operate and in modernizing the process for borrowers. Thanks to advances in technology, loan applications can, technically, be processed in a matter of hours, and loan officers can accomplish all of their various duties electronically – foregoing the traditional paper-based routine. From gathering a borrower’s financials to communicating with the real estate agent, borrowers expect a quick and seamless experience, and lenders are starting to deploy systems that meet those expectations.

It is important to recognize that not only do borrowers desire a seamless experience while working with their loan officer, but they also expect a smooth experience to occur behind the scenes. Borrowers may not be aware of all the checks and controls lenders have in place to guide the underwriting process, but they do count on it being quick and efficient. For lenders, this means streamlining how their operations teams process loans, so that when the borrower gets to the closing table, they feel confident and secure.

Data and analytics provide a proven method to accomplish this. While a lender’s operations division may be focused on underwriting and closing loans, there are data points that lenders can track to determine where precisely the loan process can be improved, which, in turn, improves the borrower experience.

For example, a key data point that we track is “underwriting touches,” or the number of times an underwriter handles a given loan. Ideally, a lender should target no more than two touches per loan, which limits the amount of back and forth with borrowers and other parties – thus increasing overall efficiency.

Capturing and analyzing data such as this provides lenders with the ability to better quantify how their teams are operating. Rather than focusing on more qualitative results, such as a borrower’s feedback, data analytics allow lenders to track specific processes, goals and results within their organization. By improving back-office operations, a lender’s loan officers are then able to improve the number of referrals they get and improve business overall.

A key data point worth monitoring is how many days prior to closing a lender sends its Closing Disclosure (CD). Generally speaking, it’s advisable to target five days prior to get ahead of the three-day CD required by TRID, but it also ensures that the borrower is fully prepared for closing day. Similarly, a lender’s Clear to Close (CTC) rate is an important metric because being Cleared to Close seven days in advance of the closing date not only allows a lender to accomplish a five-day CD, but it also accommodates the occasional rush job – which are never ideal, but sometimes a necessity.

But how should a lender go about tracking this data, and who is going to be the one responsible for it? The answer to this lies in a lender’s organizational structure. Tracking data points can be done through basic technology like an Excel spreadsheet or with other modern enterprise management services. The important point is to start tracking the data now, for without a historical record, data does not convey as much meaning or the level of context necessary for lenders to identify where improvements can occur.

Once the data is being tracked, it’s up to both management and employees to be responsible for the updates, management and analysis of the data. Not only should employees be able to view the data points they are creating to help them identify where they can make personal improvements, but management should be constantly tracking and trending data to inform their organizational goals and guide employees in the right direction – this helps management become better leaders, and employees tend to respond positively to such an environment.

Not only for lenders, but for all businesses, data and analytics represent a powerful tool to hold others accountable, create goals and achieve those goals. With data, it’s not about instituting an immediate change in the system; rather, it’s about tracking processes that are currently in place and then identifying meaningful methods of improving them.

Laura Fellman is senior vice president of operations for Churchill Mortgage.

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