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With a volatile market and changing lender landscape, the opportunity to create value depends on the quality of the customer experience.
The Mortgage Loan Process is one of the core processes of Banks and Credit Unions. It is often a complicated process spanning across many different systems and multiple departments. If this process is too slow, the Bank starts losing clients and revenues due to bad customer experience and long wait times. Gaining full transparency into the process is the key to the successful resolution of its fundamental problems.
When a mortgage application comes to HQ from one of the branches, it needs to be assessed and checked whether it is complete or whether any further information is required. The bank then makes a credit decision and sends out an offer to the customer. If the customer is happy with it, he will accept and sign the appropriate paperwork. It might not sound like it is a complicated process, but even if everything happens well within the targets in terms of both time and quality, the customer feedback is what really matters. The bank needs to make sure its customer NPS [Net Promoter Score] is improving to stay competitive in a saturated market.
An analysis of the end-to-end mortgage loan process can answer critical questions and provide insights for speeding up and improving its performance. Below are real-life examples that led to improved bottom line:
Are property valuations causing the delay?
To reduce errors and improve efficiency in the valuation process, an automated tool to could inform staff what kind of valuation is necessary for a given loan case. And to further speed up the process look at the valuation providers to find which ones are not delivering on time.
Why are the applications incomplete?
Perhaps you need to implement best practice guidelines to streamline the customer application process.
Is the problem hidden in differences between the application and the system?
Use Minit to uncover issues in operating effectiveness versus design, and lags when the process moves from one system to another.
Are income verifications taking up too much time?
The solution could be to start sending requests for verification to the accountant and the employer earlier in the cycle. Or maybe you could dedicate a portion of the team to call-outs to employers and accountants to try to ensure a 3-day turnaround.
Are mistakes commonly caused by a human error?
To prevent a human error when somebody forgets about the case implement a best practice of case owners - responsible for an individual case, end-to-end, regardless what stage of the process. And to reinforce that sense of ownership relate it to the individual's performance scorecard at the end of the month.
If you send out an offer in less than 14 days, the customer's propensity to take that loan is high. By sending it out earlier, you could increase the take-up and ensure revenue growth.
Process standardization can reduce operating costs by up to 30% for mortgage lenders, allowing them to price more competitively and expand market share.
Learn more about use of Process Intelligence in Banks and for Mortgage Process Optimization