The mortgage loan origination process can be clunky and inefficient. Ultimately, the goal of lenders is to close as many qualified mortgage loans as possible—while remaining compliant, of course. Interest rates have continued to plunge since late 2018, dipping below 4% in June on a 30-year mortgage, the lowest we’ve seen in about two years, according to Mortgage Reports. This dramatic drop in rates could potentially send consumers flocking to their lenders to refinance or take advantage of their home's equity. From a lender’s perspective, an increase in applications, in turn, increases the need for efficiency.
Across the board, our clients consistently seek ways to streamline their operational procedures and reduce the cost of conducting business, including how they originate and refinance loans. Keep reading to learn some actionable tips to help you streamline your loan origination process to realize faster turnaround times, and a reduction in the cost to originate mortgages.
Audit your origination process
Before you can identify areas where you can cut the proverbial fat from your mortgage loan origination process, it’s important to conduct an audit of your current procedures. Running a process audit gives you a “big-picture” understanding of how your loan officers and originators are currently operating and how conducive it is to their productivity.
Conducting a thorough synopsis, or a “state of the union” of your loan origination process will help you to understand how each step is being completed; what, if any, vendors are involved; the systems that have to be deployed; and the average time it takes from application to close. A few questions that you can include in your audit process include:
How are you accepting loan applications today?
What part of your origination process works well?
What part could be improved?
How do your borrowers feel about the process?
How do your employees feel about the process?
From this audit, you'll be able to find holes in the process and see exactly where things can be improved. It could be that manual or antiquated practices are dragging you down, or lack of technology makes the application, underwriting, and appraisal process move at a snail’s pace—frustrating your employees and your borrowers. Either way, you won't know the root of the issue until you conduct a thorough audit.
As you learned from your audit, once the mortgage loan process kicks off, the borrower’s loan application can cross the desk of a half dozen people. During the pre-qualification phase, verification can require employees to manually review dozens of documents, and while you want to close your loans as quickly and efficiently as possible, you don’t want to sacrifice proper verification or compliance.
One way for lenders to increase efficiencies and decrease costs is to consolidate workflows to conveniently order the multiple products and services necessary to process home loans. With access to a variety of mortgage origination products and services, financial institutions can achieve a seamless real estate processing experience with a lower overhead.
As a lender, it is necessary to understand how advances in technology and the right partnerships can streamline significant aspects of your lending operations. SWBC Lending Solutions™ is the premier provider of products and services designed to help financial institutions drive down the cost to originate mortgage, provide faster turnaround times, and meet the compliance needs of the mortgage industry.
With a focus on alternative solutions that reduce costs and streamline processes, our valuation products address the need for a property evaluation product that is more economical than traditional appraisals. Download our ebook to learn how incorporating hybrid valuations into your home equity program can help your institution reduce your loan origination costs.