During the recent MReport webinar, “Originations Demand and Outsourcing Success,” presented by Altisource, industry experts discussed the forces currently at play in the mortgage origination market, focusing specifically on how partnering with the right outsourcing experts can help speed processes, increase efficiency, and provide a better homebuying experience.
Moderated by Steven Greenfield, General Manager, Altisource, panelists included Sean Cahan, President of Cornerstone First Mortgage; Michele Kryczkowski, SVP, National Fulfillment for Planet Home Lending; and Ed VanDuren, EVP Operations for Plaza Home Mortgage.
With low mortgage rates and high demand fueling homeownership over the past year, booming business can also mean a strain on the workforce for originators attempting to keep up with demand. Webinar panelists discussed ways in which their respective firms have handled this record demand, and provided suggestions on measures that can be taken to keep workflow moving in an efficient manner despite the heavy volume.
As noted in the discussion, the refi market continues to slide, with the Mortgage Bankers Association (MBA) reporting the refinance share of mortgage activity decreasing to 61.9% of total applications, down from 62.5% the previous week.
“Refinances are still there, but we definitely have a drop of 20%-30% in our refi market, so now we have to be creative in coming up with new technology, outsourcing, and doing things to separate ourselves,” said Cahan. “There is only so much purchase money out there as well, so we are all fishing in a smaller pond.”
Differentiating yourself from the competition is a key to success in 2021, as the market stabilizes after the housing boom of the past few months.
“How I see 2020 versus 2021 through the rest of the year is that we must be able to get creative,” said Kryczkowski. “We weren’t able to be very creative in 2020 due to the volume, so I love that part of what we do in tweaking the manufacturing and controlling what we are able to.”
The influx of volume in 2020 forced many to enact new processes to keep things running smoothly in a market with record demand. Attempting to do so with many of the restrictions imposed by the COVID-19 pandemic forced many in the industry into unchartered waters as, as they were forced to adapt and survive through a period never seen before.
“Now I have the time to tinker with SalesForce and Encompass because last year, it was like taking a firehouse, turning it on full blast, and then going to take a sip of water,” said Cahan of controlling volume. “We didn’t even have time to blink. Now, we get to go back and make ourselves stand out. What are we going to do today to make ourselves different so that the consumers will want to work with us? That’s the fun side of the business.”
Others are pivoting and offering alternative products such as non-QM loans and HELOCs to their mix to recoup business lost during the pandemic.
“Looking at things in small bites is one way to adapt to a changing market,” said Kryczkowski. “If you sit back and look at factors like the reduced inventory, and things like retaining referral partners, you can get overwhelmed really quickly. Being able to offer expansive products will give borrowers the upper hand.”
VanDuren noted that at his company, Plaza Home Mortgage, they are beginning to expand their offerings to their customer base. They also took a proactive step to begin outsourcing as a means to keep their own workforce productive, while maintaining a smooth workflow.
“We at Plaza are definitely looking into the alternative products and are trying to find more ways to offer them to the customers out there,” said VanDuren. “Now, we have the time to do it where before we didn’t. We were early adopters to outsourcing. The nice thing about the transition was most of what we had to do outside of underwriting was born by our partners increasing their capacity in order to handle the influx of volume, as opposed to us having to go through that process of hiring people, and taking our best people off the floor to do the training and they would not be productive. We would just continue to get backed up and go through that vicious cycle.”
As described by Greenfield, “The outsourcers are there to compliment and allow you to do the strategic work, while they do the heavy lifting behind the scenes.”
And when questioned on why decide to outsource, most feel it provides them the opportunity to seamlessly scale their operations. On the workforce front, should volume dip, outsourcing helps prevent overstaffing. On the tech front, it provides the opportunity to work with cutting-edge tech firms, and offer your customers access to these technologies, without the pressure of having to develop and maintain these digital offerings.
“From a capabilities perspective, what we focused on from the beginning in terms of outsourcing were checklist items and things that are repeatable,” said VanDuren. “Outsourcing helped us make sure that all of our documentation was up to date. We have several locations around the country, and one of the things we learned from outsourcing was that everyone had to do everything the same way. We had locations doing things their own way, which made it difficult for things like implementing technology and change. Outsourcing has eased our ability to roll things out.”
Click here to access a recording of the MReport webinar, “Originations Demand and Outsourcing Success,” presented by Altisource.