Timeline Analysis

Efficiency and high performance are key goals for most businesses. In the secondary mortgage market, that means minimizing the loan processing time and fallout to achieve maximum profit.

Mortgage Capital Management (MCM) offers an automated report that utilizes fallout analysis to track and report customer loan processing time by source, branch and loan officer. The report is designed to allow companies to see their highest performing branches and loan officers as well as identify areas that need to improve efficiency and performance.

Many customers track processing statuses in simple stages including “documents,” “approved” and “in process.” The MCM reporting system analyzes the process by source, branch and loan officer to identify the number of days loans took to move from one processing stage to the next. The report breaks down the data by product type and provides valuable analysis information including number of extensions, extension period and percentage of fallout experienced over the timeframe. It also calculates the average final lock period versus the original lock period.

The following report was created to review a company as a whole, but could also include the applicable breakdowns by source, branch, and loan officer.

Useful information about the processing timeline can be gleaned from the report. In this example, the average number of days for a loan to close or fallout was 58 when the original lock period was 40 days on average. This means loans were hedged and processed for 18 days longer than what was originally priced. Time is money and the extended processing time affects the company’s bottom line. The additional 18 days alone, not including fallout costs or hedge costs, with an average roll cost of .375 points per month would have equaled ( 18/30 * .375 ) 22.5 basis points. Also of interest is the extraordinary long time to process loans from a status of “in process” to “approved.” The report shows it took an average of 45 days, but it took only 3 days to go from “approved” to “documents” and 10 days from “documents” to “closed.”

When broken down to the branch and loan officer level this report clearly shows which branches and loan officers are performing at a higher level versus the average and which ones are not. Important information to ensure an efficient and high performing team producing maximum profit for the organization.

© MCM 2013