A few years back my wife and I decided it was time to begin looking for a new home. She was the home shopper and I was the rate shopper, comparing various lenders, their products, rates, etc.—until I met Jerry. Jerry was a local guy with a small lender. He took the time to develop a relationship with us and was quick to respond when we had questions. His ability to counsel us turned me from a rate shopper to a committed “Jerry guy.” At the end of the day, I know I got a good rate, and even though I might have kept shopping for an even better rate, I didn’t care. I felt like my family was getting good service and that was what mattered.
There’s no question, a mortgage is the most significant financial transaction most people enter in their life and they want to know that they are dealing with a trustworthy lender who can help them through the details of the complex process. Even if your staff has the ability to fulfill this need, their time is often consumed by regulatory, credit, and operational demands that tie up focus on intricate compliance procedures. That extra time devoted to processing transactions is a finite resource that can cost you both in upfront overhead and in lost opportunities.
Time spent processing loans drains payroll—there’s no doubt about that. The rising cost of FTEs, along with the ongoing costs of employee training and the institution-wide effort required to develop and deliver updated operational and compliance methodologies, make transactions more expensive than ever.
Beyond concrete payroll costs, every minute allocated to properly documenting transactions is one that could be spent demonstrating to loan applicants why your service should convince them to stick with you, rather than bounce between lenders on a rate shopping spree. Less time with applicants increases the likelihood that borrowers will base their decisions strictly on the bottom line, rather than on the entire service experience. This contributes to over-commoditization of the mortgage lending industry, forcing lenders to win business by competing almost solely on the ability to offer the lowest rates.
Knowing that success lies in nurturing borrowers through the complicated origination process is one thing, but finding the time to explain and truly educate them on the impact of what may be the most significant transaction of their life is both a challenge and an opportunity to set your company apart from the assembly line of mortgage lending. It is possible to increase the personal time while decreasing risk by using an end-to-end transaction risk management solution that can quickly and consistently document your lending transactions with considerably less risk and human intervention.
Applicants want to know that they are in safe hands, that the people attending to their financial needs are professional, that their information is secure, and that the products they are offered serve their interests. Your company deserves no less than that same level of protection in the compliance tools you use to mitigate your transaction risk. Both interpersonal training and comprehensive solutions that limit risk are paramount. Transaction risk management tools can ensure that each transaction is completed consistently, efficiently, and compliantly, making it possible to devote time to building relationships of trust that get you more business.
About The Author
Chris Appie is an attorney and Vice President of Products at Compliance Systems, Inc. (CSi). CSi is a provider of financial transaction technology and expertise serving over 1400 financial institutions across the United States. When he’s not keeping up with the CFPB he’s trying to keep his four kids under control in grocery stores and other public places. He can be reached via email at email@example.com.