Caught in the thick of thin of things?Joe Cornoprioritizing, originating loans Almost every aspect of loan origination and processing can be controlled. However, are you constantly playing catch up - crunching past deadlines and promised delivery dates? If so, you are caught up in what I call the "thick of thin" of things. The majority of brokers and lenders have the priority of business backward. Overcoming obstacles, getting things accomplished fast and staying ahead of target dates are a never-ending battle. The majority of the industry focuses on getting loans funded first. These files take top priority because people are waiting with moving vans and the seller's house to fund so that they can close on their newly acquired property. Agents, home inspectors, appraisers title companies and everyone else want to be paid. The deal is on fire, heating up all around, and long-term relationships are on the line. The originator is no longer a loan officer, but a firefighter, running around and stomping on the hot spots that flare up. Next are the loans that are receiving their documents to be signed before making it to the funding stage. Due to playing the role of a firefighter, the originator may neglect the documentation request, losing precious time. However, more time is lost on the loans being submitted to underwriting and processed from the login stage, due to everyone focusing on the wrong end of the loan process. Of course, this means that loans being originated are given the least amount of attention. Now, we have developed a thick of thin of things scenario, and we have no control over the latter stages of the loan journey. The reason is that we did not place priority at the correct end of the loan process. The inverse of the above scenario is the solution to the problematic concept of backward prioritizing. If it were truly this simple, everyone would be doing it. There is a light at the end of the tunnel, and it is in the originator's control to get out of the thick of thin of things. Most of the time, a terrible experience is due to an originator wanting to do only the minimum. Originators want to sell, sell and sell some more. They love the pitch, the adrenaline surge and making attempts to avoid what they deem office work. They say to the staff, "Call the borrowers and get their ages and years in school. I want to go get more loans, so stop bothering me about ZIP codes, interest rates, types of loan and listed assets on the applications." Management and staff are afraid to anger a volume-producing loan originator, so they accept partially completed loan applications, and the vicious cycle of lost time at the application submission stage continues. When I was a chief operating officer, one great experience was firing the top-producing originator. This originator was indeed the top loan-volume producer, but chaos was present with every loan file, which always thickened up thin things. Once, I came into the office after hours, and a processor was there, crying at his desk. When I asked him what the matter was, the processor told me that the originator had come in, yelled at the staff on items missing from the loan files and then left. The dedicated processor was working late to complete the loan files. While the originator was out having dinner, the processor made calls to locate addresses, ages of borrowers, account data, etc., which should have been part of the loan applications at the submitting stage. I instructed the processor to go home, and I reviewed a very revealing problem - all of the originators loan files were incomplete, inaccurate and illegible, with handwritten loan applications. The entire processing system within the office changed the very next day. I created a new processing scrub sheet to align with each section of the loan application. The top of the form indicated that the process could not be initiated due to four main reasons. The first reason - application. I developed an "open trough" type of processing. No active loan file would be placed in a closed-file drawer. All files would routinely be run through the open trough system, even if the originator did not place them all there. No loan was going to slip through the cracks. The system made the originator responsible for making sure that the file was ready to go into processing. Once the originator screamed some more at our support staff for missing application data, he had sealed his fate. I performed the termination at a recognition sales luncheon the next day. Everyone's jaw dropped when I handed the top producer the volume bonus in a pink envelope. I invited the originator to leave the meeting, the office and a nice, sweet position. I announced the new system along with the new processing scrub sheet, trained the sales staff and expressed that there was now room available to be a top producer. The benefit of such a move was astronomical. The sales staff out-produced any prior month, and the loan files were processed in half of the time experienced previously. Everyone was happier to be doing his job correctly. The emphasis should be on placing priority on the application stage, which is the true remedy for getting caught up in the thick of thin of things. By taking complete, accurate and legible applications, the entire team works better and faster. I have found that the majority of originators, new and experienced, do not comprehend what a complete application is. Training is needed to understand and complete the Uniform Residential Loan Application (1003), and we have a new, revised one to learn about. If the originators are not trained to take complete, accurate and legible applications, you are going to always be caught in the thick of thin of things. Professional training is a must for the originator more so than any marketing training, because all you get is more thicker thin things as a result of better marketing. The way to eliminate the waiting moving vans, hotel stays for borrowers and angry real estate agents is by taking complete, accurate and legible applications. It will expedite the entire loan process and greatly thin out delays. Joe Corno is president of Utah-based We Be Consulting and Seminars. He may be reached at (801) 836-2077 or e-mail [email protected].
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