A recent article written by James Kleimann, published on HousingWire, describes how an increase in loan production costs is bringing lenders’ profits crashing back down to earth.
According to the Mortgage Bankers Association’s latest quarterly performance survey, IMBs posted a net gain of $3,738 per originated loan in the fourth quarter, down from $5,535 in the third quarter.
“Driven by strong borrower demand and a high in average loan balances, production volume for independent mortgage companies reached unprecedented heights.” Marina Walsh, the MBA’s vice president of market research, expressed her opinion. “While production profits remained extremely high in the fourth quarter, secondary marketing gains decreased, resulting in a reduction in overall production revenue.”
Despite the fact that higher origination volume has traditionally lowered per-loan costs, according to Walsh’s report, production expenses rose for the second quarter in a row. Personnel costs grew through distribution, fulfilment, production support, and organizational overhead, causing expenditures to rise by about $500 per loan from the third quarter.
The cost of loan production has risen as the amount of loans generated has reached unimaginable heights, causing lenders’ profits to drop. The lenders are trying to boost the closing ratio and improve customer service by outsourcing or streamlining the mortgage process.
Here are the benefits of outsourcing:
1. Reduce Operational Cost:
Outsourcing your loan processing needs is a smart way to close faster mortgages without having to employ any or minimal in-house staff. As we all know, timing is crucial when it comes to mortgage loans. You may need more manpower at peak times and very little at other times. Thus this necessitates adaptable manpower.
Partnering with a mortgage processing services company is the best option. This will help reduce the cost overheads of the lender by a significant amount.
2. Fetch missing docs and reduce iterations in processing:
Having a list of mandatory paperwork that buyers should provide before the application process begins is an essential checklist that directly affects the process. Fetching Borrower Docs actively reduces total document processing time, including confirmation, verification, authentication, cross-checks, and a buffer to handle any errors without further delay. This helps boosts Closing Ratios. Furthermore, establishing a consistent contact channel to ensure that everything is in order will aid in the quicker and smooth completion of mortgage applications.
PrivoCorp provides reliable Mortgage Loan processing support services to lenders. We will assist you in engaging with borrowers about missing documents, as well as speeding up underwriting and increasing closing ratios.
3. Run virtual 24/7 opertions:
We run virtual operations 24 hours a day, 7 days a week to ensure that processing and loan closing go as quickly as possible. When you work with a mortgage processing company, you can be assured that all of your back-office operations will be managed efficiently, allowing you to close quickly. You can then devote all of the attention to improving customer relations, which would lead to increased customer satisfaction.
What Makes PrivoCorp a Good Choice:
Mortgage processing partners have a deep understanding of compliance and regulatory issues. Hiring a mortgage loan processing company can prove to be highly advantageous to the lender. PrivoCorp offers customized solutions to meet the lender’s requirements and business models.
Furthermore, PrivoCorp recognises the importance of these loan processing transactions. Any action taken by various members of the team is done with a sense of urgency in mind. Wouldn’t it be nice to have access to a better mortgage processing partner?
Talk to PrivoCorp now!