0
0
I just returned from speaking at the ABA Real Estate Lending Conference in Orlando. It was a great conference and the Hyatt Regency was a great venue. I only regret I couldn’t spend more time in Orlando.
The conference offered a myriad of information, products, and services covering just about all areas of commercial and residential mortgage lending. Topics discussed included such things as:
Topics discussed included such things as:
- Megatrends and best practices shaping the future
- Competitive landscape analysis
- Advances in technology
- Trends and best practices
- HMDA overview and preparations
- A chat with Rob Chrisman
- Economic report from Lawrence Yun, NAR’s Chief Economist
- And much, much more…
One thing that permeated throughout the meetings and side conversations at the local watering holes was the discussions and comments about the rising cost of loan production. Seems that with volumes down and margins thin, everyone is very concerned about expenses, as they should be.
But, how do we get there from here? Mortgage lending is a complex process with rules and regulations that vary by loan type, state, and investor.
Lenders can’t dance fast enough to keep up with the beat of all the new regulations and the challenges from increased competition. The only answer to reducing costs and increasing productivity is through technology and/or outsourcing.
As Mike Tyson once said, “…everybody’s got a plan until they get punched in the face…” Then it’s time to adjust, or in some cases, abandon the plan. I believe it was Einstein who said (I paraphrase) that the future doesn’t belong to the biggest, or the strongest, or the fastest; it belongs to those who can adapt and change.
It’s not how fast you change, but how you change fast. Identify the areas that cost the most to operate and take up the most time. Then look for the technology that can automate those processes.
There are existing systems and applications out there that can automate most activities; including online applications, data collection and imaging, information validations, loan approvals, closings, delivery, and QC. Soup to nuts, it’s time to start looking.
You can bet your competition is looking to offset the drop in refis with increased production from other sources. Some will get a bigger piece of a much smaller pie; others need to find ways to survive on less business. That means cutting costs.
You can only cut so many people before it starts to hurt. What you need to do is make fewer people more productive and efficient. How? Technology and outsourcing!
In addition to technology, you can tie variable income to variable costs through outsourcing. The most obvious place is in your QC operations.
Reduce your overall fixed expenses by outsourcing your required pre and post close QC reviews. As production decreases so does your cost to QC, plus you eliminate the fixed asset costs of space, equipment, and employee benefits.
If you are large enough and decide to keep QC in-house, there are platforms available to automate this function as well. LoanLogics happens to offer one of the best, along with other applications to assist in a better quality management and help to reduce risk and costs.
Technology is taking off. Let it be your rocket to the future.
