So I’m about 60% of the way through building the loan process for my customers. I set out with the goal to have a very predictable loan process that could close all loan types in ten days. The industry average is three-to-for weeks. I wanted to cut that up for a number of reasons. If I never get the process right–to the point of a guarantee–I still benefited immensely (lesson: put yourself out there).
With the outcome–speed–being the primary function, there are a lot of different requirements on that process. One example is the dreaded “workaround”. Often in the mortgage industry, some documentation will come up later in the process that wasn’t disclosed–or asked about–up front. An example would be major write offs on your taxes. There are other issue–property seasoning, asset seasoning, declining income…all of which come up on less than 2% of all loans, but all of which can make the deal skid out and fall into the ditch.
The industry tolerates a certain amount of “oh hell,” in the business. To close in 10 days, you gotta get that out, so you gotta collect the things that have made deals die or get delayed, and ask the questions up front. If the customer cannot complete the application, you have to inform all parties that you have an incomplete application, and are thus not on the clock.
To get faster, you have to have a process that anticipates delays, even unpredictable ones. To get faster…you have to have well established, rock solid processes and a commitment to whatever throughput that your industry calls for.
It used to take me ten minutes to take an application, and I was proud of that. “Hey, I’m in and out in ten minutes…” If the file was a solid, A-paper deal, with no surprises, then I’d be in great shape. Asking only the minimum questions makes this job harder, so now I have about a half-hour application process, and I set expectations more solidly.
This is FASTER and MORE EFFICIENT because I know if the deal is–or isn’t–going to go through, and what the trouble spots are going to be. An extra 20 minutes covers questions about assets, write offs, past credit histories…questions that I didn’t formerly ask, and questions that allow me to confidently say, “Hey, we’re gonna have loans done in ten calendar days, 100% of the time,” and mean it.
So, if you’re trying to gain velocity/inventory turns/whatever, what steps can you take to speed yourself up? How can you think about your procss to gain speed?
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