Nationwide Lending Support Services--How To Do ItLee Howlettlicensing, nationwide lending, Internet
What occurs when your number one customer calls and asks you to
close a loan in Anchorage, Alaska? Does this sound crazy? It
happened to my company recently. Did we close the loan? You bet we
did. We could not refuse and soon, neither will you.
The truth is that the lending industry is facing the need to
service an increasing amount of larger territories. We post our
companies on the Internet, promise nationwide coverage and then
must deliver these services. Sounds possible if you consider the
major metropolitan areas; however, nationwide means not only
covering Los Angeles and Chicago, but Lizard Lick, N.C.; Zumbrota,
Minn.; and Anchorage as well.
So, along with the tremendous opportunity that the Internet
provides, comes the need for an infrastructure that can sustain the
highest level of service that customers come to expect. The
following are a few tips developed as our nationwide network was
built and can work for lenders as well as it did for us.
++Don't do it all.
Be selective in the products and services you take national.
Some are more easily delivered nationwide, while others will not
work. Understand the markets you are entering and decide ahead of
time which products will best serve their needs. You can always add
later, but it is bad to remove products after you have introduced
them.
++Make sure you understand how business is conducted in
an area before entering it. There are jurisdictional
anomalies in how business is conducted in each area. For example,
in one market, mortgage taxes are due when you close a loan, while
in other areas, there is a simple recording fee. How you structure
your charge-backs to customers for these services can greatly
impact your carrying costs. Therefore, you need this information
before you decide upon them.
++Don't overlook the need for ongoing quality
control.
This issue will make or break you. If you have a reputation for
quality in one part of the country, you must maintain it when you
enter another area. To do so, hire a vendor manager for each
product line. This person will recruit the local staff, qualify
them in terms of skills, train them on your service levels and
monitor their delivery.
++Establish clear channels of communication to place
orders, receive work back and track the status of
problems.
The Internet can be the key to making this work. If you will
deliver on a national footprint, your greatest concern must be
synching your hours of operations with the needs of your borrowers.
Regarding the Anchorage customer, she made it clear how we would
communicate with her since she did not want to receive a phone call
at 3:00 a.m. With the Internet, we had the information she needed
at her convenience. Communicating via the Internet allows both the
company and the customer to manage time more efficiently.
++Don't forget to make it personal.
Develop systems that are generic enough to handle all customers,
but specific enough to deliver the particulars a borrower might
want. Some of the lenders we work with want to hear from us at the
time of the closing, while others are comfortable allowing our
closing agent facilitate the entire transaction. This is the kind
of flexibility you may offer borrowers, regardless of where they
are located.
++Get all products on one electronic
platform.
This allows you to receive work in a "lights-out" fashion. This
means when the lights are out, you are still working. The work is
still being processed and delivered and applications are moved
throughout the networks to meet borrower's expectations.
++Don't overlook the magic of critical
mass.
It is difficult to have national delivery without a substantial
client base that can drive volume through your network. The more
volume, the more loyal the service agents in markets are. The more
work you can provide them, the more attention you can receive in
terms of service levels. If you are placing one order a month in
Ohio, you will not receive the service from a title agent or
appraiser that you would receive if you had a thousand orders.
There has to be a critical mass before you move into a region. I
emphasize "region" because we find that we are not moving into new
states, but moving into regions. It is a new marketplace, one in
which the customers are based regionally. For example, if you move
into Washington, D.C., you also have to consider delivering in
Maryland, Delaware and Virginia because the customer base will
consist of customers who commute to this metropolitan area.
++Evaluate each expansion critically.
The decision of expanding to a particular region is not easy.
Oftentimes, you expand when your customer base drives you to a
particular market or when your competitors are also expanding.
Alongside the Internet, bank consolidation and mergers are
driving the push for nationwide lending. An institution identifies
a footprint. They want to be in a particular metropolitan area, but
before doing so, must ask themselves the difficult questions, such
as can our vendors grow with us? Lenders have relationships with
vendors that work. They typically have a lot invested in these
partnerships. Experienced vendors can help lenders deliver in a new
market by knowing the local practices and delivery standards. The
right vendor can often reduce or eliminate the need for lenders to
invest in "brick and mortar" costs to service these new areas.
Lenders must know whether their vendors are willing to develop in
these areas or have to find new areas in new markets. Coupled with
learning a new area, this may be too difficult to undertake. It is
a decision that the lender must make long before taking the first
application.
Returning to the loan in Anchorage--it is already closed. We
closed it on time and in the convenience of the customer's home.
Who knows? Next month, we could receive ten more. Welcome to
today's "nationwide" marketplace.
Lee Howlett is president of Integrated Loan Services (ILS).
He may be reached at (800) 842-8423 or e-mail
[email protected].
