In a recent National Mortgage News survey, lenders indicated that in 2016 they are looking for ways to get back to business of generating more loans (Back to Business). With TRID now in full swing, lenders are now looking at ways to increase loan production, improve customer service and streamline operations.
Lenders can use what they’ve learned in meeting the new TRID requirements and in what they’ve done in the areas of compliance and loan quality, to improve upon defect management and streamline their operations. With lenders now required to perform pre and post close loan audits by Fannie, Freddie and FHA, they have the opportunity to use the information derived from these audits to meet their initiatives in the areas targeted for improvement.
By paying attention to what is detected in monitoring TRID compliance and the results of the required quality control audits, lenders can identify the areas causing them the most problems and those hindering their performance. These are the things that delay approvals and closings, adversely affect employee performance and produce a drain on profits. Correct these and a lender is well on their to overall performance improvements.
Improving technology to help quickly review loans and identify defects for early correction will not only improve loan quality and performance, it will also help to improve employee effectiveness and performance.
This will result in more loans handled per person at every level, from originators through post-closers, thereby reducing the costs to originate. This savings can be used to improve pricing to garner more business, reinvested in technology to improve processes and/or realized as increased profits. A real triple threat.
By using what’s been learned and developed to meet the recent compliance and regulatory challenges, lenders may take the results of their investments and turn them into real income. Further, lenders may explore the use of outsourced technology and staffing solutions to meet the new audit requirements to continually ensure loans quality and compliance without a major investment in additional staffing and other resources. Handle more new business with fewer new hires.
Audits costs can be made a variable expense that is tied to the loan production volumes. Depending on size, why bear the permanent cost of staff and resources, like office space and equipment, when these costs may be mitigated by outsourcing. Lenders can then spend their time and money concentering on what they do best, leaving the quality and compliance checks to those who specialize in these areas.
Progress is building upon what we learn to make things better. With a slight breather, now lenders should take a step back to take stock in where they are, where they want to be and the best way to get there. Most have made some major changes in technology, processes and in how they do their business.
Now is the time to take full advantage of those investments and changes to meet the challenges of the next generation in lending.
What are you doing to prepare? BTW, don’t forget about HMDA…