How to Combat Rising Costs & Creeping Inefficiencies in Your Mortgage Process

The true test of a point of sale’s worth is in the numbers it drives. When searching for a suitable solution for your business, it’s crucial to ask: Can the technology reduce the time-to-close, drive down costs, and reliably enable LOs to close more loans? 

An essential driver of lending profitability is an efficient, cost-effective process—and yet the industry as a whole continues to battle inefficiencies and high manufacturing costs. To gain a competitive advantage and bulletproof margins against market lows, lenders need to streamline processes and save basis points wherever possible.

The rising cost of loan origination

While lending volume and profitability rise and fall with economic and housing cycles, one trend has remained constant: The cost to manufacture a loan has risen steadily over the past several years. According to the Mortgage Bankers Association (MBA), Q3 2022 saw total loan production expenses—including commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations—soar to a study-high of $11,016 per loan, up from $10,937 per loan in Q2 2022. To put that number in perspective, loan production expenses have averaged $6,829 per loan over a nearly 14-year period.

Ballooning loan costs impact profit margins no matter the market cycle—but especially in downcycles, when production expenses can lead to a net pre-tax loss, those costs can easily result in company layoffs or worse. This dynamic makes it vital for point-of-sale technology to drive down loan costs with efficiency-driving functionality.

Creeping inefficiencies

When you look at all of the steps and individuals involved, it’s easy to see how inefficiencies, miscommunications, and extraneous touchpoints can enter the lending process. At scale, those small inefficiencies can snowball into extended timelines, dissatisfied borrowers, and rising expenses.

The key to true, sustainable efficiency in the mortgage industry is digital transformation that reimagines the origination process, automating workflows and driving out unnecessary steps and bottlenecks. Increasingly, innovative solutions will separate lenders into two camps: those who passively react to market changes and those who arm themselves for volume highs and lows by building peak efficiency into their businesses.

How Maxwell alleviates market challenges

Maxwell is built to not only capture maximum loan volume during upswings, but to recoup revenue and save costs when inevitable challenges surface. We help our customers achieve resilience and longevity through market cycles by actively driving down costs and streamlining the processes from loan application to the secondary market.

Reducing per-loan costs

By streamlining each step of the process, Maxwell speeds borrowers through the process while reducing errors and eliminating busy work. The result? An average of 21 bps saved in costs per loan.

  • Technology built to reduce errors and increase productivity: From application to closing, Maxwell automates tedious tasks, improving loan file quality and accuracy and allowing lending teams to focus on generating more business. That means fewer costs spent on bottlenecks, incomplete applications, and low-value work.
  • One partner for end-to-end mortgage solutions: Our point of sale pairs seamlessly with Maxwell’s full suite of solutions, from loan fulfillment and first-of-its-kind processing technology to due diligence/QC and secondary market trading. By streamlining the entire mortgage process and ensuring high-quality files, Maxwell optimizes profitability on each loan.

Optimizing efficiency

Maxwell technology gives you the efficiency and competitive edge you need to weather today’s low-volume environment and prepare your business to thrive in the next upcycle.  

  • Automated condition management: Intuitive borrower condition management speeds borrowers through the process, with no-delay document collection from thousands of financial institutions, verifications, and e-signings.
  • Native eClosing: Our eClosing solution streamlines the closing process so you can exceed borrower expectations, reduce delays and errors, and handle more closing volume.

Want to learn more about how Maxwell Point of Sale can boost your bottom line and improve your process? Click here or schedule a meeting with our team.

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