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MReport October 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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34 | TH E M R EP O RT FEATURE time, enabling the processor with a more efficient process, quicker close time, and the ability to carry a more significant pipeline. Given the millennial era, speed and agil - ity will surely help lenders score brownie points with borrowers, giving them a competitive edge. We must remember that there is always a prescribed process and then there is an idea. In challeng - ing times like today, lenders must be open to looking deep into their operations, identifying possible redundancies and implementing changes that boost throughput, while decreasing costs. The first step here is to do a detailed return on investment with a third-party provider. Analysis of a lender's internal expenses, identi - fying hidden costs, drawing out current processes, and transforming some of the ROI to impact three important areas that have a direct effect on profit margins: time to fund, cost to fund, and increase throughput. The Right Partnerships T oday, every lender has a vendor management division tasked with vetting third parties that they may wish to work with. But filling out forms and sign- ing contracts will not inform the lender as to the true capabilities of a potential partner. Likewise, checking references and perform - ing onsite visits, while a good start, are not enough to know whether you have the right part- ner. The real key is discussing the future of your business with your prospective partner. Too often, prospective partners want to talk about labor arbitrage, their ability to lower costs by throwing more people at a prob - lem at a lower cost per employee. That may be part of the solution during the right part of the cycle, but there is much more to it than that. The right prospective partner will also talk about business- process transformation. The right partner will bring a combination of technology, process and domain expertise, proven metrics, steady clientele, and the proven ability to help companies re-engineer their processes for success. This requires the partner to study the client's operation and bring ideas to cut cost and increase productivity, while maintaining 100 percent compliance. They will be able to guide them to levy smarter processes that remove obsolete practices, reduce labor costs, and increase efficiency. This is hard work, but given the increasing competition lend - ers are already seeing and the dim prospects for higher mortgage loan- origination volumes, lenders need to do this work so they can find the right partners and increase their profit margin on every loan they originate. Only by reducing costs through effective third-party vendor partnerships can lenders increase their margins and profits in 2018. ERIC WILSON is SVP Business Leader - Mortgage at SLK Global Solutions. He can be reached at eric. wilson@slkgroup.com.

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