Market Analysis: Lender Gets Immediate ROI

*Lender Gets Immediate ROI*
**By Tony Garritano**

***Market conditions remain volatile. Lenders need the right tools to enhance efficiency, promote transparency, increase customer satisfaction and remain profitable. For all these reasons and more, 1st Advantage Mortgage chose to implement business intelligence technology by Motivity Solutions, creators of the award-winning business management platform that helps mortgage-related companies get more business and more out of their business.

****The mortgage industry faces many problems. First, the foreclosure/default wave continues. Combined, Fannie Mae and Freddie Mac still hold more than 180,000 homes repossessed through foreclosure, known as REO, despite reductions in the third quarter. Second, new regulation shows no signs of letting up. For example, the Consumer Financial Protection Bureau is close to completing its redesign of the Good Faith Estimate form that home buyers receive after applying for a mortgage — but some industry groups believe the agency needs to test the disclosures on real loans. Lastly, the MBA predicts overall volume to be at a 15-year low next year.

****All of these conditions described mean that lenders are going to have to look hard at technology as a vehicle to remain competitive. The problem that lenders face in their quest for the right technology is they simply can’t afford to go with “unknown” or “untested” applications, which is precisely why 1st Advantage turned to Motivity Solutions. The lender was in search of technology that would instantly improve its operations and its bottom line, which it found in Movation, the flagship product of Motivity Solutions.

****In an uncertain market, lenders need to implement technology to promote certainty. How does it work? One of the dashboards is viewed daily by upper management to view lock activity. Specifically, 1st Advantage is looking to determine fluctuation in lock activity to plan resources and manage its all-important warehouse lines. The dashboard also shows trends in lock activity compared to loans that are submitted to processing to determine if there is a trend differential in lock versus float activity. This dashboard shows 1st Advantage the “bubble” as loans move through the pipeline. Now using this technology 1st Advantage can determine activity and volume as the loans progress to underwriting and closing to compare trends/match resource allocation based on this trend analysis.

****That’s just one example of how 1st Advantage is using one of the dashboards to get immediate ROI and greater visibility into their business. This technology also promotes accountability within 1st Advantage. Another dashboard is used to monitor loan officers closely to ensure that loan officers are submitting their files promptly to processing. The LO is actually compensated based on their ability to get their files in timely. They are also compensated based on how long their files take to get processed and underwritten. Loans displayed in the “Process Received Not Opened” status after 6 days is a flag to the manager to review and determine if there is an issue.

****If we turn to hard dollar savings realized, 1st Advantage uses yet another dashboard within Movation. A “Locks Due to Expire Report” is automatically sent to all loan officers if a file is within 5 days of lock expiration. This has made the sales force responsible for extending locks which in turn protects the client and company from costly re-pricing. The operations management uses dashboard reports that warn their staff if an appraisal or a credit underwrite is nearing its expiration. The use of exception based reporting has allowed 1st Advantage to highlight and focus on potential problem areas that can become costly mistakes. Other dashboards are used to advise management of investor purchase trends and warn staff about loans that are closed but not insured within a target range. All departments are monitored using Movation. The management team has adopted the use of these visualizers to proactively manage their respective departments. The COO and upper management have a real time view of changes taking place as volume fluctuates.

****In totality, 1st Advantage has gained valuable insight into its business that has led to immediate return on investment. As the saying goes, knowledge is power. 1st Advantage has used the vast amount of visibility it now has into its operation to its betterment. For example, 1st Advantage has made tremendous strides to ensure that underwriting turn times are within 24 to 48 hours. Loans showing up in Movation that are outside of 1st Advantage’s tolerance require immediate attention. Using Movation, 1st Advantage has been able to see volume trends weeks before bottlenecks occur. Staff is added before it becomes an issue.

****The total picture here is that 1st Advantage has chosen to implement smart technology during a very volatile time in the mortgage industry to get instant return on investment and the strategy is working now that the lender is using Movation.

****Market conditions remain volatile. Lenders need the right tools to enhance efficiency, promote transparency, increase customer satisfaction and remain profitable. For all these reasons and more, 1st Advantage Mortgage chose to implement business intelligence technology by Motivity Solutions, creators of the award-winning business management platform that helps mortgage-related companies get more business and more out of their business.