Posted by MeridianLink | October 15, 2021

Identifying Hidden Costs: What Are Mortgage Origination Inefficiencies Costing You?

Costs associated with originating mortgages are steadily rising. Both new loan regulations and heavier workloads are likely decreasing the productivity of your underwriters, but those aren’t the only factors costing you money. If your mortgage loan origination system (LOS) is disconnected, inhibiting workflow efficiencies, the borrower experience and your ability to cross-sell, you might be bleeding more money than you realize.

Banks and credit unions are advised to perform a budget assessment in order to identify how using disparate systems might be costing them, both in inefficiencies and in your ability to cross-sell. These areas might not seem directly related to your mortgage LOS, but they could have a significant impact on your bottom line.

Investigate Your Customer Relationship Management (CRM)

Customer relationship management is a core system for any client-facing business and your mortgage origination process is no exception. Just because the need for a CRM is universal doesn’t mean that every business should use the same CRM software. A standard system will provide some value for any company in need of assistance with their customer data, but it won’t provide the biggest return on investment.

The most efficient and effective solutions for banks and credit unions are the those custom-built for digital lending. With the right CRM tool, lending institutions benefit from more than just easy data collection and organization. Specialized solutions know what kind of customization is needed for banks and credit unions, which means they can integrate those tools into the platform for advanced data analysis.

Not only is this convenient, but it has material benefits. By automating that customization, the right CRM can free up lending institution resources that would otherwise be spent manually processing the data. Employees can dedicate their time to other matters, while still speeding up the overall analysis timeline. Invest in a CRM that can be easily integrated within your mortgage LOS to connect the data you harvest from consumers.

What Does Loan Officer Recruiting Cost You?

Banks and credit unions looking to scale must also consider recruiting costs. With the right technology, scaling doesn’t necessarily mean increasing staff count. Boosting efficiency with the right mortgage LOS can help you scale while also increasing the expertise of your existing staff.

Research from the Society for Human Resource Management found that the average cost-per-hire of a new employee is $4,129 and that it takes 42 days on average to fill a position. This may come from hiring an external team to recruit or from paying internal staff to interview and process applicants. Considering the complexity of mortgage origination, lending institutions must understand the true total cost to recruit loan officers.

Ideally, the right mortgage LOS will automate and streamline the origination process so staff can focus on higher value tasks. This enables you to enhance your staff experience while reducing recruiting costs. It’s easier—and less expensive—to retain current employees than to recruit, so it makes sense to focus on finding the right technology to support your current staff.

An effective mortgage LOS will ensure full-time employees are maximizing their time by reducing manual tasks. Working with a mortgage LOS that has deep expertise in the industry can streamline onboarding, especially if loan officers are already familiar with and have experience working within the system.

How Does Your Team Manage Reporting?

Auditing internal processes is critical to identify hidden costs associated with manual processes. Unfortunately, auditing without a comprehensive reporting system is burdensome and complicated. Without deep insights into where time is being allocated within your mortgage LOS, unnecessarily cumbersome processes become hard to remediate.

Without visibility into all this activity, it can be impossible to have oversight of the associated costs. As a result, your team may find themselves plugging holes manually or missing gaps altogether. By automating these processes and introducing a comprehensive reporting program, lending institutions can minimize their financial drain.

An added benefit of robust reporting is that lending institutions gain access to even more advantageous data — as well as the framework to make sense of it. Not only will any gaps be revealed, but you can also identify any areas of underperformance within the lending practice. These can become your focus for even greater operational optimization and future-proofing.

Does Your Post-Closing Process Support Cross-Selling?

Leading mortgage loan origination systems take the closing process as seriously as every other stage. Right now, your post-close process may involve your staff manually chasing down paperwork from borrowers — materials that would have been automatically captured if you were using mortgage origination software. It is important to close this technology gap in order to optimize your closing, not only to save your employees’ time but also to ensure accuracy and standardization across data.

This is not just due diligence, but an investment in future opportunities for your business. The documents and data that are available through the closing process can help simplify cross-selling down the line — if you have the foresight to collect and store it. By integrating the information with your CRM, you can also make it easily accessible for any of your team when the next opportunity arises.

Can You Support Digital Document Imaging?

The final area of consideration is your digital document imaging process — or lack thereof. Many lending institutions find they have a cumbersome process for capturing documents imaging electronically or one that is too manual. This can steal time away from more value-added processes within the mortgage origination process.

A connected mortgage LOS should also integrate with digital document imaging tools to streamline the process. Digital document imaging enables customers to upload necessary files and documents from their mobile device, storing them directly to the database your mortgage LOS. In addition to optimizing internal processes, this functionality can significantly enhance the customer experience.

Reduce Origination Costs with a Seamless Mortgage LOS

A connected and robust mortgage LOS is integral to streamlining loan origination workflows while providing a positive borrower experience. Disparate, disconnected software and manual processes can be the death knell of banks and credit unions that are struggling to compete and scale. Working with a leading LOS provider can ensure that you keep backend workflows seamless while providing the best customer experience possible on the front end.

MeridianLink Mortgage was developed by MeridianLink to provide lending institutions with a seamless, cloud-based digital lending solution that reduces origination costs. As part of the MeridianLink One platform, MeridianLink Mortgage also allows you to offer online account opening and the ability to cross-sell consumer loans to your mortgage customers. Additionally, the MeridianLink One platform includes debt collection software, analytics, and all the reporting your organization needs.

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