As the refi boom declines – taking with it the intense production volume of 2020 and early 2021 – and we move into a richer market in purchases, lenders are seeing declining profit margins and increasing spending on investment. ‘origination.
According to Mortgage Bankers Association, independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $ 2,023 on every loan taken in the second quarter of 2021, down from a reported gain of $ 3,361 per loan in the first quarter of 2021. Over the same period, total loan production expenses increased to $ 8,668 from $ 7,964 and personnel expenses averaged $ 5,911 per loan from $ 5,523. by loan.
With this squeeze in margins, lenders are looking for ways to improve their operational efficiency and reduce origination costs.
Main operational challenges
WFG Enterprise Solutions aims to help lenders do just that. The company starts by helping lenders figure out exactly what to work on to improve efficiency and reduce costs.
To do this, in June and July 2021, WFG Enterprise Solutions interviewed mortgage executives from across the industry about their top operational challenges. Key challenges included lead times (56%), operational capacity, volume and staffing (34%), technology implementation and integration (34%), and communication ( 31%).
The right tools to help you
WFG Enterprise Solutions uses the information gathered from surveys to develop products and services that align with and help solve the challenges of its lending partners.
Technologies helping lenders streamline operations amid squeezing margins include its WFG MyHome consumer collaboration portal and DecisionPoint, an instant title decision engine.
WFG’s MyHome brings together participants in real estate transactions into a single, easy-to-use ecosystem. This portal improves communication and transparency, thus improving the customer experience.
WFG’s MyHome also eliminates duplicate touchpoints, provides real-time status updates, enables proactive communication, and facilitates the collection, storage and sharing of data and documents. It also eliminates redundant tasks and unnecessary requests, while collecting and delivering essential documents and information in a secure and centralized repository.
By using WFG’s MyHome, lenders can work more efficiently, spending less time searching for documents or information from borrowers. This, in turn, reduces turnaround times and closing time, which are top priorities for lenders.
Communication is also improved, as the system provides personalized communications via SMS, email or dashboard notifications to alert attendees to important milestones. The portal also provides a convenient, secure and intuitive self-service ecosystem, improving operational transparency.
The DecisionPoint automated securities decision tool aims to improve lender pipeline management, enabling them to use their time proactively and efficiently.
By analyzing the real estate charges and the circumstances of the applicant, DecisionPoint is able to immediately project a reliable title clearance timeframe and provide a detailed pre-title report summarizing its findings. These reports allow lenders to focus their time and energy on loans with clear titles, avoid spending time on loans that will not close, and, if they wish, take a closer look. loans that may require some form of remediation.
Because DecisionPoint identifies title defaults in advance, lenders are able to assign these poorly rated transactions to the appropriate processors, allowing them to process â€œclearâ€ loans faster and more efficiently. Lenders are thus able to work profitably, spending less time on transactions that are unlikely to close.
DecisionPoint reduces application closing times, speeding up the title insurance process to close loans faster. In addition, it allows lenders to use their staff more efficiently and improve their conversion rate. More successful loans also mean higher profits.
As operating costs rise and profit margins tighten, lenders need the right tools to work efficiently, communicate effectively and reduce turnaround times. WFG Enterprise Solutions offers several solutions that meet these needs and works in partnership with lenders to help them achieve these and other goals.