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Automation & Technology

3 ways top correspondent lenders are staying ahead of the next mortgage loan cycle

  •  By ICE Mortgage Technology

Author: Eric Kujala, VP Product Marketing, ICE Mortgage Technology™

MarketWise, LLC recently conducted a study focused on the financial and operational benefits that technology delivers to correspondent lenders in their TPO (third party origination) channel. The results of the study created a clear picture about the ROI potential of Encompass TPO Connect® for top correspondent lenders. I had the opportunity to meet with Jordan Brown, CEO of MarketWise, along with two top performing lenders in the correspondent lending space, Alysse Prosnick, SVP Operations, Angel Oak Mortgage Solutions, and Tim Kalaris, TPO National Sales Manager, FBC Mortgage. My main question to them was, how are they setting themselves up to succeed in a market where going digital is essential, margins are tight, and customers want a personalized touch? They shared with me where their focus will be heading into 2022, and I’m going to share that with you.

Transparency and ease of use

When it comes to maintaining TPO relationships, it’s all about transparency and ease of use, according to Alysse. She says, “Ease of use is most important, because it's a new channel for them (customers) to deliver loans. One of the things that I really love about TPO Connect is that we have the ability to make it really easy for them to send loans to us. And the second part is just transparency into where we are in the purchase process.” Your customers need to have fully transparent access to updates that answer questions like:

  • Where are we in the process?
  • What key dates should I be looking out for?
  • Has the approval come out?
  • Has the closed loan package been delivered?

Using workflow tracking to connect and provide transparency strengthens customer relationships, and that’s essential in a relationship-driven business like correspondent lending. Jordan says, “This is a thin margin, high volume manufacturing process, so the key is to maintain those relationships. Technology is one piece of the puzzle in that relationship. If you have a great price and a great product, but it's impossible to get the loan over, and you don't know where the status is, and the communication is poor, you're not going to win. How do you use technology as a lever point to differentiate yourself? And to brand yourself and maintain relationships?”

Loan processing time and efficiency

Tim Kalaris points out that shortening cycle times really comes down to increasing efficiency and doing more with less. When it comes to scaling your business, the goal is to leverage technology that allows you to keep your resource output consistent as your business grows. He elaborates, “I think we have to do it faster. We have to do it better. We have to do it consistently. Anything that helps you do that is going to accrue to the bottom line. It's going to create a better customer experience and stickier relationships.”

Tim says that he thinks of his organization’s success as a stool that is supported by 3 legs:

  1. Product - Offering the most up-to-date products and services that attract the most relevant customers.
  2. Price - Making sure you’re in line with the competition in a tight marketplace.
  3. Process - Nailing down every opportunity for increased efficiency.

Having all three of those legs in place and functioning optimally is what builds a solid foundation to grow on, while supporting the most essential piece of all - a good experience for the end user.

Automating data analytics for efficiency

When interpreting the results of his study on the impact of TPO, Jordan identified an undeniable link between process automation and scalability. He honed in on two major points of focus within the course of operation: a tech platform that actually improves and increases your capacity, and your ability to leverage that platform. He says, “I like to call operational leverage ‘a sneaky good thing.’ It gives you balance in your business, so you don't have to go through the hiring and firing cycles. You can keep the great people that you have and retain them without going through cycles unless there's a significant downturn or upturn in the business. That lets you flex your operations up and down. You can react appropriately in good markets, bad markets, sideways markets. You can appropriately take management actions to maintain your business and be happy.”

Jordan goes on to explain that having a clear understanding of your data is what brings processes that need to be automated and optimized to the surface. You need to know which products are really driving your business, and where your profit metrics are compared to last month, last year, and to the competition. That’s how you identify where you’re really making money.

Conclusion: Implementing automation is a necessity, not a luxury

Efficiency, ease of use, and transparency are no longer nice to have in a mortgage industry that has already evolved for the future. They are basic staples of business that customers are expecting you to have a handle on, and automation is the only way to gain that ground. Tim explains the pivotal importance of meeting these expectations with a poignant comparison. “You can go in and buy a Ford F150, and you can load that thing up. You can drop 80 grand on it. You can also buy a house in Rochester, New York for 80 grand. But you walk out with your Ford F150 from the dealership in a couple hours. It takes you 45 days to close on your house. So, we've got to minimize that time, and the technology is doing that. Account executives who are successful understand the role that it plays, because it makes their lives easier and allows them to go out and concentrate on getting more business, instead of having to babysit loans.”

View the entire webinar for correspondent lenders on-demand here.

View the entire webinar for wholesale lenders on-demand here.


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