What Data Insights Do Mortgage Lenders Need Right Now?

The novel coronavirus outbreak tested lenders’ ability to adapt to sudden, monumental change. Branch managers are grappling with an influx of record-high refi volume and lack of staff capacity all while transitioning to a remote business model. Instant data insights and concise communication are now more important than ever to keep employees connected, on track, and of course, motivated.

To absorb as much refi business as possible while keeping consumers happy, branch managers will need to go “back to basics” in the evaluation of operations and production data.

Here are three real-time data analytics branch managers can use to keep themselves out of the weeds and ensure the entire branch is on the same page.

1. Pull-Through and Fallout 

Pull-through and fallout data are essential to helping branch managers identify where they are losing business, why it’s happening and what steps they can take to prevent future losses. Take, for instance, a common lender predicament in our current market: volume is high, but fallout has increased. A branch manager who’s satisfied to simply attribute unusually high fallout to an increased rate shopping market and wash their hands of it could be losing a large swath of good loans. On the other hand, a savvy branch manager may be able to drill down into the details and see hundreds of millions of dollars in loan volume.

Mortgage branches around the country had a significant number of loan applicants with a 640 credit score, when earlier this year, investors started hiking the minimum credit score requirement to 680 and beyond – putting lenders at risk of having to withdraw or deny these loans. With the ability to analyze pipeline data in real time, they may have been able to act quickly enough to prevent losses from occurring rather than being reactionary to the news and seeing an increase in fallout. For instance, perhaps they could have re-locked those at-risk loans with another investor.

Occasionally, circumstances may make losses unavoidable – but without real-time pull-through and fallout data, you wont’ be able to make that determination with confidence.

How many steps does it take for your business to calculate and prepare loan commissions each pay period?

2. LO Performance Data

Lenders also need to insight into LO performance so they can grow their businesses by knowing who to incentivize and where to cut ties. Imagine your review of LO compensation reveals that Mike B., who gets paid 150 bps per loan, is only averaging $1.5 million in volume per month. Mike B. is a solid producer, but how does his production and compensation compare to other producers in the organization?

While conducting the same compensation audit, you notice that another LO, Malia R., is pushing $4.5 million a month but only getting paid out 75 bps per loan. In this instance, you have a highly undervalued, up-and-coming LO that is at risk of getting recruited out from under you. You should consider compensating Malia at a higher rate or risk losing her to a competitor offering higher pay.

3. Pipeline Activity

Branch managers need the latest data available to make informed business decisions and strive for a proactive versus reactive approach to the market. Aggregate information (such as how many closings are expected this month) and individual loan information (such as a particular loan’s status and any obstacles standing in the way of closing it) are vital.

Having these data insights at your fingerprints allows you to identify problematic loans and triage them. Systems that can flag loans for qualities such as abnormally long appraisal times, long float times or ratios can prevent setbacks such as lengthy turn times and tying up operational resources.

Where to Start

The aim of monitoring business data is to keep costs down and employees productive in any mortgage environment. If you’re just getting started, find out how your employees are getting the data they need by issuing surveys, scheduling one-on-one meetings or starting a dialogue. Take the winning findings and optimize those processes by sharing them with the rest of your team. The key takeaway is to determine what data is needed, who can see it, and who needs to see it to effectively do their job in any environment.

Business Intelligence (BI) technology is a cost-effective and efficient way to stay on top of the ever-changing mortgage landscape. Software like Nexus Vision provides turnkey dashboards and reports to improve visibility and collaboration with increased productivity and efficiency across your mortgage company.

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