Rocket Pro TPO said Tuesday it is introducing Target Profit Control to help ensure profitability goals are met by correspondent lenders on every loan.
The company said in a statement it is the only correspondent investor offering this profitability management, describing it as the latest way Rocket is helping partners through its Correspondent Assist Program.
“Target Profit Control is a dynamic loan-level pricing adjustment (LLPA) that is set within the loan officers’ profile in the Rocket Pro TPO portal and is automatically applied to all loans,” the company said in a news release. “The technology adjusts the LLPA to ensure the target profit it achieved no matter the loan characteristics.”
Mike Fawaz, Rocket Pro TPO executive vice president, said no one else in the market offers this feature.
"This puts correspondent lenders in a position to set up their loan originators to make sure they’re maximizing on their profit," he said in an interview with NMP. "Brokers love this because they can 'set it and forget it."
Watch it on The Interest: Alleviating Lender Stressors
Rocket Pro TPO said the tool addresses the following areas for correspondent lenders:
- Eliminates misquoting or loan adjustment oversights by applying systematic profit levels.
- Prevents time loss. The target profit is “baked into pricing adjustments,” so there is no need to monitor points and discounts to ensure margins are maintained.
- Blocks unnecessary qualified mortgage (QM) failures by including adjustments at pricing. Correspondent lenders will no longer experience QM failures for fee adjustments to hit their profits.
- Eliminates the cost of paying an outside vendor to help keep loan-level profit in line.
Last October, Rocket launched Correspondent Assist, offering non-delegated correspondent lenders new tools and the option to use a suite of new tech-driven fulfillment services. The new feature will be added to that platform.
On the platform, mortgage lenders can control processing, closing, and funding, while the lending partner, such as Rocket Mortgage, handles the underwriting. After closing, Rocket Pro TPO serves as the investor, purchasing the loan from the correspondent.
Borrowers can use Rocket Pro TPO’s digital client portal to apply, submit their documents, e-sign, and manage the whole mortgage process and keep it all under the partner lender’s branding. Rocket will generate loan estimates, closing disclosures, and final closing documents, then issue them to the client through the portal.
Fawaz said borrowers also would benefit from the Target Profit Control because it would help make the process for correspondent lenders more efficient.
"This will have zero effect on the borrower, other than it gives them that speed to close loans faster," he said.
Unlike Rocket’s other platform, Correspondent Flex, correspondent lenders using Correspondent Assist won’t have to take care of upfront disclosures and closing documents on their own.
In Correspondent Assist, Rocket’s technology handles that for them, consolidating this fragmented experience into a one-stop shop. This option can eliminate significant costs, streamline processes, and speed up loan purchases for the correspondent lender.
