As the refi boom declines – taking the intense production volume of 2020 and early 2021 with it – and we move to a more purchase-heavy market, lenders are seeing a decline in profit margins and an increase in origination expenses.
According to the Mortgage Bankers Association, independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $2,023 on each loan originated in Q2 2021, down from a reported gain of $3,361 per loan in Q1 2021. Over the same period, total loan production expenses increased to $8,668 from $7,964, and personnel expenses averaged $5,911 per loan, up from $5,523 per loan.
With these tightening margins, lenders are looking for ways to enhance their operational efficiencies and reduce origination costs.
Top operational challenges
WFG Enterprise Solutions aims to help lenders do just that. The company starts by helping lenders pinpoint exactly what they need to work on to improve efficiency and cut costs.
To do so, in June and July 2021, WFG Enterprise Solutions surveyed mortgage lending executives from across the industry on their top operational challenges. Among the top challenges were turnaround times (56%), operational capacity, volume and staffing (34%), technology implementation and integration (34%) and communication (31%).
The right tools to help
WFG Enterprise Solutions leverages the information gathered in surveys to develop products and services that align with and help solve challenges for its lender partners.
Among the technologies helping lenders streamline their operations amid margin compression are its WFG MyHome consumer collaboration portal and DecisionPoint, an instant title decisioning engine.
WFG’s MyHome brings real estate transaction participants together within a single, easy-to-use ecosystem. This portal enhances communication and transparency, improving the customer experience.
WFG’s MyHome also eliminates duplicate touchpoints, provides real-time status updates, enables proactive communication and facilitates data and document collection, storage and sharing. It also eliminates redundant tasks and unnecessary inquiries, as well as collects and delivers crucial documentation and information in a secure, centralized repository.
By using WFG’s MyHome, lenders can work more efficiently, with less time spent chasing down borrowers for documents or information. This, in turn, reduces turnaround times and time-to-close, which are top priorities for lenders.
Communication is also improved, as the system delivers personalized communications via text, email or dashboard notifications to alert participants about important milestones. The portal provides a convenient, secure and intuitive self-service ecosystem as well, enhancing operational transparency.
The automated title decisioning tool DecisionPoint aims to enhance lenders’ pipeline management, allowing them to use their time proactively and efficiently.
By analyzing property encumbrances and applicant circumstances, DecisionPoint is able to immediately project a reliable title clearance time frame and provide a detailed pre-title report summarizing its findings. These reports allow lenders to focus their time and energy on loans with clear title, avoid spending time on loans that won’t close and, if desired, look further into loans that may require some form of remediation.
Because DecisionPoint identifies title defects up front, lenders are able to assign those poorly graded transactions to the right processors, freeing them to process “clear” loans more quickly and efficiently. Lenders are able to work cost-effectively as a result, spending less time on transactions that are unlikely to close.
DecisionPoint reduces application-to-close turnaround times, accelerating the title insurance process to close loans faster. Additionally, it enables lenders to use their staff more effectively and improve their conversion rate. More loans successfully closed means higher profits, as well.
As operational costs increase and profits margins tighten, lenders need the right tools to work efficiently, communicate effectively and reduce turnaround times. WFG Enterprise Solutions offers multiple solutions that address these needs and works in partnership with lenders to help them achieve these and other business goals.
For more information about WFG Enterprise Solutions and how its technology helps lenders, visit wfgls.com or email [email protected].
