Restoring Profits in Dodd Frank Era: A Mortgage Lender's Checklist

Restoring Profits in Dodd Frank Era: A Mortgage Lender’s Checklist

October 9, 2017

With the implementation of Dodd-Frank Act, the lenders have been walking a tight rope. They can no longer adopt an apathetic approach towards the transaction process. To stay compliant with stringent regulatory framework, the lenders will have to focus on keeping costs in control, improve efficiency by integrating technology into their process, consider scalability to surge productivity and collaborate with reliable partners to expand their scope of work. The idea is to make mortgage lending process so tight that it can automatically eliminate incompetence and redundancy that leads to increased compliance costs.

In other words, to breathe profits back into the lending ecosystem following CFPB regulations, the lenders need to implement a compliance friendly holistic approach. This approach will be directed towards saving costs and improving processes over a period of time. Here are some things that lenders can consider to make lending process more profitable.

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Managing Costs by Improving the Process

The real estate environment is marred by fluctuations that has posed to be one of the biggest challenges for industry players. The pressure to keep costs under control, while acclimatizing to the volatile personnel, technological and operational needs of the market is monumental. To overcome this challenge, the lenders must conduct a comprehensive assessment of their existing processes and determine performance yardstick that all the stakeholders can follow religiously. Consistency between vendors and internal departments is necessary to keep variable costs from spiraling out of control.

Incorporate Technology for Customer Loyalty

Borrowers not only want fast service but also low interest rates and reduced closing expenses. In the industry that is already suffering from rising compliance costs, this expectation may be counterintuitive. However, with the use of proper technology the lenders can streamline their process, thereby reducing costs and encouraging customer loyalty. Facilities like quick access to loan information, electronic document submission, 24/7 access to customer support and self-service portals can make things more transparent for the borrowers and allow lenders to process loans accurately and economically.

Scalable Processes Based on Customer Requirements

The inefficiencies in lending process can affect 20% of mortgage profits if the lenders do not adapt themselves to volatile mortgage landscape. They need to balance their growth strategies against risks and costs. The best way to ensure both is by reducing the turnaround time without disturbing process accuracy. Lenders can achieve that by introducing domain expertise complete with innovative technology and strong compliance into their mortgage transaction. They need to focus on creating end-to-end systems that can keep the entire process under the same fold and minimize errors and delays along the way. Since mortgage industry is mainly demand-driven and prone to economic shifts, sometimes scaling down is as important as scaling up. Lenders can consider integration of cloud-based technologies in their mortgage transactions that can allow this sort of adjustment without the need for installing or reinstalling existing hardware/software.

Forming Strategic Partnerships to Maximize Time

Qualified personnel are the backbone of profitable lending process. A lender that can achieve two key elements – time and skilled professionals, can have the most organized and cost effective loan system in place. For lenders to churn loan files 24/7, they need to form global partnerships to increase the pool of trained resources worldwide. This means they will be able to use their in-house staff for more time-sensitive tasks and keep the file in motion round the clock with the help of offshore support. A delivery model that contains both onshore and offshore backing can have tremendous advantage on timelines.

An outsourcing partner that has extensive mortgage experience to stay within the regulatory framework and deadlines can improve efficiency and increase profitability. We, at Expert Mortgage Assistance, have been pioneering patented processes, helping our clients achieve fine balance between costs and competence. We refine our processes regularly to incorporate changing technologies and aim to provide maximum accuracy in least amount of time. Talk to our experts today and allow us to help you streamline your mortgage process.

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