Mortgage Lender: Major Originator Improves Efficiency without Deploying New Technology

Client Situation

Streamlining Mortgage Operations Through Knowledge Work Standardization

For years, the financial institution had been the dominant home loan originator in its regional market. But efficiency improvement and upgraded scalable processes were needed to trim back staffing growth from new mortgage compliance guidelines. Since the pandemic, the bank had invested in multiple new core technology platforms and a leading LOS. But the executive team was having trouble realizing benefits from the implementation. And the growing “online mortgage lenders vs. banks” battle increased the need for improved customer experience. The lender had all the tech it needed – but efficiency still lagged, and rework was rife. They needed to standardize and automate deeper and faster.

The internal operations consulting team had succeeded in applying process mapping, improvement and automation techniques for small-scale initiatives. However, they struggled with end-to-end process improvement. After a year of effort, they still had not fully documented the loan origination process. The CEO appointed a new president of mortgage with a simple mandate: “Speed this up—now.”

Client Description, Project Scope, Objectives

This lender operates across 15 eastern states. Mortgage operations includes over 3,000 employees, excluding the loan originators, in 1,500 branch locations. The operations group supports everything from the loan origination process through servicing, default and payoff. The president saw how The Lab’s “Process-First” and technology-agnostic approach could accelerate the stalled cost improvement effort.

The process improvement acceleration effort began with an 8-week, end-to-end Phase I Analysis & Discovery. This delivered a guaranteed, self-funding, efficiency improvement plan that was jointly implemented in 7 months by client improvement team and The Lab.

By rapidly partnering with the internal operations consulting team, The Lab quickly standardized mortgage operations into a “knowledge work factory.” The group exceeded its cost improvement target by half while also improving information quality and total customer experience.

Mortgage Operations Transformation – Examples

The Lab implemented more than 250 non-technology & standardization mortgage process improvements. Examples:

Reduction: Loan Originator NIGO (Not-In-Good-Order) — Inbound NIGO volume averaged double the comparable industry rate for mortgage originators. The Lab implemented lean standard work templates to reduce numerous, conflicting retail branch origination forms and instructions. A single customer contact point was implemented to jointly increase productivity and service performance.

Knowledge Work Capacity Model and Super KPIs — The Lab implemented simple productivity metrics within two weeks for measuring knowledge worker productivity. These indicated up to a seven-fold variance for identical, basic work activities. A capacity model measured the operational efficiency for each worker on these basic activities. The seven-fold, maximum variance (700 percent) was reduced to 50 percent in two months.

Mortgage Robotic Process Automation — Utilizing Microsoft Power Automate Robotic Process Automation licensing that the client already had, The Lab’s RPA development team rapidly deployed a half dozen bots that clawed back thousands of hours of error prone labor on processes like: Loan QC, Collateral Monitoring, Loan Payoff Quote Requests and Flood Reports.