One way to get better at something is to do it over and over and then continually monitor the results. This works for almost any endeavor – from automobile manufacturing to marathon racing to cooking the perfect steak.
The problem is, once most people learn how to do something well, they stop checking outcomes. If it worked before, they figure it will work again. Why waste the time?
The mortgage industry is no different. Many lenders and servicers fail to review files for errors consistently through quality reviews. Instead they wait too long between reviews, or skip them altogether. Some compare quality reviews to going to the dentist, not realizing that small problems, like cavities, can quickly grow into a larger ones—such as CFPB fines and buybacks.
We all know clients who are guilty of this. So, what can be done?
First, think of regular loan quality reviews as putting your files on a sort of wellness plan. For all clients, we recommend monthly reviews. As they say, an ounce of prevention is worth a pound of cure. It’s not that painful, and it’s certainly less expensive than buybacks or fines.
Next, understand that loan quality reviews take hardly any time at all. We hold conference calls with clients in which we and the client go over the overall health of their files. We identity and explain any deficiencies and then create a viable action plan to address them. These calls usually take only 20 to 30 minutes. Time-wise, that amounts to just 1 percent of a 40-hour work week.
Most of our larger clients already participate in these calls, but truthfully, every client should. When issues are found, most clients can take care of the issues themselves by making changes to their manufacturing process or by instituting other corrections. By the way, timely, regular audits are also very important—and they do not take very longer, either.
Done properly, ongoing reviews really are preventative medicine, and save our clients enormous amounts of time and money. More importantly, they lead to operational improvements and make a big difference in a lender’s relationships with investors as well.
If you’d like to put your loan files on a wellness plan, give us a call – we’d love to help.’