For many mortgage lenders, hiring strategies are a struggle. With the refinancing business dropping by more than 50% in the past year, overall volumes have been eviscerated for most originators, who have been forced to spend the past year shedding loan officer headcount after being burned by over-hiring in previous years. As rates now hover at their all-time lows — while applications are again on the rise — lenders are again scrambling to add sales personnel and can’t hire quickly enough.
Originators who are thinking of the industry in historic terms (and using traditional service delivery models for hiring) will unfortunately be destined to repeat the same failures unless changes are made and automation is added to the process. As other industries have shown, repeatable and effective scaling requires the implementation of technology to automate sales and production and allow for change to happen efficiently.
In the traditional mortgage industry model, sales (e.g., loan officers) and production (e.g., processors, coordinators, underwriters) comprise 40%–60% of the origination cost. Scaling up to absorb new demand also carries tacit costs related to recruiting, training, reporting and compliance. With such little margin left, incurring these costs over and over when the market shifts is easily avoidable.
While originators were previously constrained by the available tools, the technology has now evolved to the point that more progressive models can support scaling to support market demand. For example, as more and more consumers move online, traditional loan officer activities such as acquiring customers and taking applications over the phone are now going digital – cutting down on an incredible amount of legwork, reducing errors, and, most importantly, saving time.
Technology now available to streamline the loan application process enables consumers to:
- Intelligently select their own product and pricing — for example, a conventional 30-year fixed might have one rate without closing costs covered and another rate with closing costs included.
- Know what documentation they need to provide to their lender, and to provide it as soon as they submit their application.
- Communicate and collaborate online and receive automatic notifications generated on behalf of the lender as they go through the process.
These technologies significantly reduce or eliminate much of the coordination and processing activities performed by loan officers, loan coordinators and loan processors. Loan officer-lite and super-processor roles are now being created by forward looking organizations that are redefining the way in which lenders interface with consumers. And it’s all happening thanks to new technology that allows lenders to scale and automate repeatable processes.
For example, Roostify cuts down the application process by hours (and in many cases, days) for both the customer and lender by simplifying how information and documentation is pulled into the application and creating a mortgage experience where all parties can collaborate on document exchange and e-signature, event scheduling and communications so they can get to closing faster. Another common example is automated 4506-T solutions that take hours, and sometimes days, out of the closing timeline.
Change is Coming
Online consumer-direct lenders are leading the change in the industry because their core value proposition is to convert the self-service consumer into a mortgage. However, as more consumers become accustomed to an online mortgage experience, they will expect even traditional brick and mortar lenders to move to a service delivery model that incorporates a digital experience and consumer self-service components. Changes in service delivery for a more streamlined experience for both consumers and loan officers in turn alleviates the need to ramp up staff for an uptick in applications, as your current loan officers will be processing more loans in less time.
So instead of scrambling to hire, and then shed, staff — the answer is simple — change the way you operate to enable your existing team to do more with less. The technology is available to allow for these changes and will help your organization prepare for a drastic shift in demand. An added bonus to changing the process from the point of application is that consumers will benefit greatly from the change as well, enhancing customer service outward and creating a differentiator among mortgage lenders.
