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What Is The True Measure Of A Top Producer? (Part Two)

While most talk around regulatory issues this year centers around TRID, the less recent changes to the Truth in Lending Act (TILA/Regulation Z) remain the focus for sales managers. Consistently ensuring that originators are not steering consumers into transactions not deemed to be in the best interest of the borrower, based on the ability of the originator to receive greater compensation is as difficult as it sounds. This challenge for sales management is compounded by the need to refine originators’ prospecting and qualifying efforts to produce application files that are complete as well as compliant.

To address these challenges, loan originator scorecards are a necessity if lenders want to consistently evaluate their loan officers using multiple criteria, instead of rewarding just one behavior, traditionally funded volume.

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In addition to promoting compliance and efficiency, originator scorecards enable the lender to enforce accountability and transparency. With data comes insight, and with insight comes power.

In the end, that insight can be made accessible to investors looking to buy loans from the most transparent lender, regulators looking to make sure that the lender is on the up-and-up, and borrowers looking for instant status updates on their loan. Lenders actively using scorecards are seeing an immediate return on their investment in these and many other ways.

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To illustrate how lenders are utilizing powerful performance and scorecard tools, Jackie Amato, president of TowneBank Mortgage, uses Motivity Solutions’ Movation dashboards to monitor pipeline activities, production goals, and originator activity and performance.

Each individual loan officer utilizes pipeline dashboards to track his or her loans as they progress through the loan origination system (LOS). The TowneBank originators also focus on lead management and creative ways to cater to their best, highest-value referral sources.

TowneBank proactively tracks individual performance to hold team members accountable and to target training opportunities. More importantly, via individual scorecards, Movation will soon enable employees to self-monitor and strive to improve based on the goals established for them by their managers and the company.

From an executive perspective, TowneBank’s Amato watches trends to gauge potential ebbs and flows in production volume so that she can anticipate activities and allocate resources accordingly.

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How To Get More Intelligent About Your Business

Mortgage companies have traditionally been among the more reluctant to embrace new technology given their sensitivity to spending time on non-revenue-generating act1vities. With loan volume as the key industry metric performance improvement initiatives have rarely evolved beyond basic productivity and operations training. For managers and executives, effects such as fluctuating processing timelines and pull-through rates, historically viewed as only semi-manageable, must now be examined to determine their exact causes. Here’s how lenders can achieve this goal:

Motivity Solutions has released targeted solutions built on the award-winning mortgage business intelligence platform Movation. These solutions can be implemented in 24 hours, compressing clients’ time to benefit down to three business days. Each solution is focused on the standard departmental disciplines that span most mortgage organizations, including Executive Management, Compliance Management, Retail Sales Management, Wholesale Sales Management, Correspondent Lending Management, Processing Management, Underwriting Management, Closing Management, and Post Closing Management.

“Since our inception, we’ve known that the time has come for the mortgage industry to finally embrace business intelligence. If there was ever a perfect storm threatening an industry, it’s the one that’s been brewing since 2007,” said Motivity Solutions CEO Tyler Sherman. He’s referring to the massive changes in the mortgage industry since the subprime collapse and subsequent global economic crisis. Since then, record numbers of mortgage firms have been closing their doors amid tightening regulations coupled with an unprecedented market downturn. “Our industry is one of the very last to evolve,” Sherman noted. “Most other industries have been competing on analytics for years. Without analytics, you’re simply not competing. You’re out.”

“Our clients have started to ask better questions,” he added. “It’s no longer enough to know how many loans fell out during a given month, for example. They want to know what types of loans those were, where they were geographically, and what divisions or individual staff members had a hand in working on them. They’re looking for common threads so they can provide pinpointed coaching for individual staff, or even cycle off a product that they may not be good at to focus on loan products with better pull-through rates. These are new questions, and Movation can provide answers”

Even though his firm is generally seen as a software provider, Sherman doesn’t see business intelligence as a ‘technology first’ type of initiative. “BI isn’t necessarily about technology. It’s about making companies more profitable through clearer thinking and better decisions. Technology is just a component of it. It’s a means to an end. Every lender has an excellent data store by virtue of their production and accounting systems, and properly leveraging that data is the first step in any BI initiative. Once they begin to analyze previously hidden or under-valued information, they have what they need to take corrective action.”

The recent focus on out-of-the-box functionality doesn’t mean that Movation has lost any of its configurability. Sherman believes that the current version gives lenders the best of both worlds “It took some time, but building plug-and-play solutions was the right decision at the right time. Once lenders are up and running, they can either tailor the pre-built pieces they’re using, or they can build some of their own functions from scratch. Many of our early clients who were unable to fully implement the original toolset are now coming back for the new prepackaged solutions.”

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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.