The Mortgage Industry is extremely competitive. With escalating customer demands, digitization is the key to ensure fast and accurate processing. With the current low-interest rates, loan volumes have been high and it is an opportunity for lenders to capitalize on. However, it is imperative that lenders are able to convert and close loans in order to improve the closing ratio.
Closing ratio is a key metric that can directly boost profitability for Mortgage lenders. Increasing processing requirements, often tend to impact the Closing ratios and hence add to costs and also affect profitability. In some cases, low closing rates are a direct indication of inefficient loan processing. However, very often while the processes may be competitive, unsatisfactory borrower user experience, lack of good communication, or even complete absence of it can delay the mortgage origination process and result in mortgage fallouts. So, here are some tips on how to Boost the Closing ratio and improve profitability.
1. Accelerate Loan Set-up
Loan Processing is by far the most time-consuming processes, and customer drop-offs increase each time the delay prolongs. Boosting the closing ratio would hence depend on being responsive to the customers and offering a faster loan set-up process, having a seamless communication channel available and making it all digital for convenience. Mortgage lenders deploy various methods for accelerating the complex data intensive Loan set-up process. This includes the employing a highly skilled and efficient team, loan packaging, document management, related checks and verifications, and fraud detection amongst other things. The integration of technology for automating loan set-up and processing makes the indexing, stacking, and analysis of borrower documents faster and with more accuracy.
2. Faster Underwriting Process
Loan Set-up is followed by the underwriting stage. Key in faster underwriting is the availability of the right documents. It is necessary to minimize the iterations at the underwriting stage and ensure that all the necessary documents, that may come up for review are available for the underwriter. These can include things like credit score, income, and employment verification, etc. Availability of these documents ensures that decisions can be faster, and the productivity at the underwriting stage is improved.
3. Improve Accuracy by Eliminating Errors on Loan Disclosures
Streamlined practices to align with the changing industry policies and regulations help in improving accuracy. Efficient workflow for smoother mortgage closing process, right from working with settlement companies to get the taxes and fees right are mandatory for preparing error free closing disclosures. Mortgage Processing Support Services teams ensure that a skilled Quality Assurance team is available to audit the daily processing and to warrant that issues related to wrong disclosures or disclosures are reduced. Such efforts not only improve accuracy but also eliminate compliance challenges faced by the lender.
4. Ensure Tolerance Threshold in Compliance
Even when equipped with all the accurate and comprehensive information, meeting the various compliance norms as laid down by the regulatory authorities is another aspect that cannot be overlooked. Getting on the wrong side of compliance is not an option. This requires standardized practices and diligently staying on par with the changing norms. Ensuring that the fees reported on the Loan Estimate fall within the given tolerance limits on the Closing Disclosure are other aspects mortgage lenders need to focus on to ensure tolerance threshold in compliance.
Mortgage Process Outsourcing offers an efficient way for lenders to decrease the number of mortgage fallouts and improve profitability. They must have a trusted team that is accountable and prevents human errors as much as possible to support lenders with their mortgage onboarding requirements seamlessly. Processes need to be in place to reduce misinformation and missed timelines and to ascertain that the goals are met accurately. All of this helps in boosting the closing ratio and improving profitability.
PrivoCorp provides reliable Mortgage Loan processing support services to lenders. In addition to running the mortgage operations smoothly, PrivoCorp also assists in reducing expenses without risks, making it a win-win situation for both the lender and the customer.