MReport November 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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30 | M R EP O RT FEATURE W ithin nearly every mortgage team, there is processor bias: a form of discrimination where a mortgage team's bankers would rather have their loans submitted to one processor over another, usually due to the desire for increased efficiency. But why is that? Are these preferred processors that much better or have they figured out the secret sauce? The answer usu- ally comes down to two things: systems and organization. They may have clearer spreadsheets, workflows, and naming conven- tions. They are highly organized and able to prioritize, etc. However, when processor bias is present, it creates inefficien- cies that trickle down to the production team, slowing down closings and limiting the amount of business originators can take on. This not only results in a poor customer experience for borrow- ers, but lenders can also become less competitive—something they can't afford to be right now. Consider that the inventory of homes remains at a record low, down 12% from just a year ago. At the same time, 20% more Americans plan to move this year compared to last year. As they relocate, consumers are battling over the limited number of homes available. In fact, homes are spending, on average, just 17 days on the market. Mortgage teams must be able to keep pace in this new environment, and removing processor bias is a good place to start. To remove processor bias within the mortgage branch, lenders should consider these six strategies. 01 Terminate First-In, First-Out Process T oo many processors work on the FIFO (first-in, first-out) method, leading to bottlenecks that back up the system. The easiest and fastest loans get overlooked because other loan ap- plications were ahead of them. However, the date that a file is submitted should not be what dictates its priority in the pipeline. Processors must be able to quick- ly review a file and schedule the tasks as necessary. Otherwise, they risk spending time on a loan that takes 45 days to close before handling a loan that will only take seven days. 02 Allow Parallel Processes S imilarly, working simultane- ously on multiple processes can ensure the most efficient loan production system. Often, proces- sors will order title work and then wait for the title to come back before moving to the next step. This is inefficient. A better practice is to evaluate the file and determine the time- line appropriately. Some items are lengthy while others are ready to be completed concurrently. The best workflow follows both linear and parallel processes. 6 STRATEGIES to Eliminate Processor Bias When processor bias is present, it can create inefficiencies that trickle down to the production team, slowing down closings and hampering business. By Adam Batayeh

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