To start reviewing fall out may not be useful without reviewing where in the process the fall out is occurring, and identifying the reason and fall out type (cancelled, withdrawn, net operating income, denial, etc.). Do take notice of trends. Do some loan officers, processors etc. have a higher number? If so, it could indicate a training issue.
For example, reviewing approvals vs. declines may not be valuable without reviewing the number of change of circumstances per loan, the number of counter offers (i.e. a change of product or program) or the number of non-standard conditions issued at approval. Similarly, reviewing the number of days from approval to close may not be valuable without also reviewing title issues like ordering delay, defect, backlog due to COVID-19; collateral issues like valuation errors or appraisal delays; or even borrower-related delays tied to homeowners insurance, income interruption, unsatisfied conditions or insufficient funds to close.
By looking at these items you may discover an opportunity for education or a clarification of your process and sometimes it will need some alterations. Some will be easy fixes and others will take more time and effort. Masking a metric can be disastrous.
As an example, to reduce the number of holds or suspends, the lender’s operations team has increased the number of non-standard conditions on approvals thus reducing the number of files that are suspended and reducing the number of days from origination to approval. However, the file may need multiple reviews with the possibility the conditions may not be able to be satisfied. The cost of this exercise extends beyond reputational risk and internal expenses – it even may result in secondary market fees and negative customer service impact. Lenders must identify any issues sooner rather than later to ensure 2021 is a more productive and successful year.
Invest In People
As mentioned, sometimes the process is not the issue – it may just be that loan officers need to be brought up to speed. If this is the case, it is time to put a renewed emphasis on education. Taking the time to make sure everyone is on the same page can make all the difference. People often make errors simply because they were not educated about the procedures in place. Start 2021 with education initiatives that get everyone up to speed to ensure a high quality of production.
New Year, New Processes
Protocols have clearly shifted in 2020 – as has nearly everything else. Start 2021 by reevaluating and redefining processes, if needed, or educating your loan officers to make sure that everyone is well-equipped to avoid critical errors. Most importantly, in this new year, be open to adapt and change – no matter what the year throws at you.