The mortgage industry around the world, and especially in the US, has seen a lot of changes over the years. Ever since the housing crisis of 2006-2009, banks were forced to become more stringent with their mortgage lending rules. Combining it with one of the biggest economic downturns seen in a decade, the mortgage industry as we know today, stands on thin ice.
Today, a median borrower in the US puts 5% down payment for their home purchase, as compared to 20% even a decade ago. This risk, combined with price wars, new CFBP regulations, and other associated challenges have resulted in many mortgage lenders looking towards mortgage service outsourcing to cut down costs and improve productivity.
Profitability ratios for mortgage lenders are at an all-time low, and as a result, mortgage service providers are trying to use innovative tactics to lure buyers again, while providing them with the best customer service. Mortgage outsourcing benefits are many! It primarily helps mortgage lenders to take a load off when it comes to high-volume, time consuming tasks in loan processing, accounting, underwriting, post-closing, title ordering, examination, etc.
Such activities, while important, are not directly tied to a mortgage companies' bottom line. In today's competitive atmosphere, success is therefore directly connected to how efficiently you manage your business by hiring BPO firms to take care of the mundane, day-to-day work.
The financial meltdown notwithstanding, mortgage process outsourcing has helped countless mortgage brokers, banks, and lenders to come to terms with new age customers and their varied demands. Some of the key advantages of mortgage service outsourcing include -
Outsourcing with the correct service provider is not as easy as it seems. At the same time, one of the biggest misconceptions around outsourcing is that only large companies benefit from the same. Mortgage outsourcing needs careful deliberation, but once you know which processes you consider as the most time-consuming and resource-intensive, you can go ahead and outsource even if you run a small community bank or lending company. This is because most competent outsourcing service providers provide extremely scalable services tuned to your requirements, and can help you cut down costs massively
Whether you have a small business or a large one, infrastructure costs will always eat into your bottom line. One of the most important advantages of outsourcing mortgage services is the access to the latest technology you receive by default.
Digitization is extremely necessary in today's business world, and more so when it comes to the usually content-heavy mortgage processing work. By outsourcing your tasks to a capable service provider, you can not only receive access to the latest digital tools, but also track the exact state of a file or process as and when you want. Since you do not have to buy the infrastructure directly, you never have to worry about the upgradation and maintenance costs either.
Big data is all the rage nowadays, and many financial institutions are now actively using big data analytics to service their customers better and cut down the red tape associated with mortgage processing. But as an SMB, startup, or community lender, you might not have access to big data modeling which can help you chart loan performance and make use of the vast amounts of information at hand.
Mortgage service outsourcing can help you get access to the latest in big data analytics, allowing you to drive decisions about how many loans to approve, the pricing models for the same, and the mitigation techniques which need to be employed, just in case. If your outsourcing service partner can help you leverage big data techniques, then you can see a marked increase in your profits and customer satisfaction, while ensuring all decisions are made based on solid, always available data sets.
With the increase in competition, one of the ways in which mortgage lenders are trying to differentiate themselves is by providing excellent customer service. Better customer retention by default leads to better business, especially if you are planning to expand your business soon.
By outsourcing your business processes, you can help providing your customers with a flawless loan application process, which often is a stressful period for the customer. Call center services are one of the most important, and most outsourced services out there. Even if you have lesser than 100 customers, providing them with a call center toll free number to solve their issues can vastly make a difference to your brand image.
Some of the other benefits of outsourcing mortgage services include quick and efficient call answering, faster complaint resolution, 24/7 call center support, etc. Apart from call centers, you can also outsource data entry processes, documentation validation processes, etc. which can directly affect your customer satisfaction numbers.
Mortgage processing consists of complex tasks which are difficult to perform and require exceptionally niche skills. Such services, including escrow services, payment processing, investor-reporting etc. therefore always require the attention of your middle or senior management. Focusing on these tasks takes a lot of time and effort, which could otherwise be spent on managing compliance risk, devising new product strategies, etc.
One of the benefits of outsourcing mortgage processing is that such tasks can be completed by the highly skilled team of your service provider, allowing you to focus on your core objectives while adeptly helping you deal with the excess work. Many mortgage tasks such as tax monitoring, mortgage servicing and sub-servicing, origination-processing, etc. can therefore be easily completed by your offshore service provider, allowing you to maximize profitability and growth.
The mathematics of mortgage outsourcing is simple. Currently, if you are to assume that your overall expenditure on your business processes is X, then outsourcing to an experienced service provider can help you receive similar or better-quality results at a fraction of X. Most third-party service providers have reasonable service fees. On top of that, based on your requirements these fees are extremely customizable, and can help you deal effectively with off seasons. You also save big time on infrastructural or staffing costs which is an added bonus.
The mortgage industry has an extremely iterative nature, compelling businesses and financial institutions to streamline their operations regularly and revamp their product portfolios based on market demand. This cyclical nature leaves very little time for accuracy, especially given that most mortgage lenders will be working on different products in order to meet their targets. One of the benefits of mortgage service outsourcing is that it allows you to work with competent service providers who have enough manpower to complete projects on or before time, while delivering a level of accuracy you can expect only from seasoned professionals. Outsourcing can also help you keep up with the changing demands and improve your overall efficiency and allow you to gain extra flexibility in meeting deadlines.
Growth is the key to financial sustainability, and this is especially true for financial institutions in the mortgage field. Mortgage companies who are looking to expand their operations in new territories must therefore focus on acquiring the services of specialized companies who can not only provide the reliability, but also the scalability to ramp up operations and support business operations as and when requested. By implementing these practices and partnering up with a service provider, you stand to gain a lot as compared to the overall cost
FWS is a leading BPO company with a deep domain expertise in the mortgage field. Over the years, we have catered to the express requirements of financial institutions, retail lenders, investors, wholesale lenders, services, and small to medium-sized mortgage companies. Our mortgage services continue to evolve on a daily basis and we believe in delivering high value mortgage services backed up by our cost-efficiency guarantee.
Contact us right now to know more about our solutions and how they can help you create sustainable business impact through the innovative use of technology, platforms, people, and partnerships.