The Power of Data for Mortgage Lenders: How to Leverage Insights to Save Costs & Drive Efficiency

With this year’s market trajectory uncertain, lenders can’t afford an inefficient process. In a period of recovery, where margins remain modest, minor inaccuracies and extraneous touchpoints can easily add up to erode profitability.

“While loan volume is still recovering, it’s vital for lenders to lean into leveraging technology and outsourcing solutions to reduce operational waste and create an origination platform that can flex with the market,” advises Robert. “In the current environment, lenders can’t paper over inefficiencies with wider margins like they have in the past. Rather, they should use 2024 as an opportunity to deeply analyze their processes, with an eye towards not only methodically reducing margin leakage, but also improving efficiencies that will filter to their bottom lines.”

Despite the need for efficiency, the cost to produce a loan continues to rise. The MBA’s recent quarterly report shows that total per-loan production expenses rose to $11,441, resulting in an average net loss of $1,015 on each loan originated. These numbers starkly illustrate the importance of process efficiency; if lenders hope to maintain profitability in today’s landscape, they need to aggressively optimize each step of the loan manufacturing process.

Real-time insights for lending process improvement

In the quest to hone your lending process, you’ve likely considered the vital role technology plays in streamlining tasks, improving turn times, and automating workflows. Maxwell Point of Sale, for instance, shaves more than 13 days off the time to close while saving 21 BPS on each loan originated. Today, these powerful benefits are non-negotiable to reducing lending costs and boosting efficiency—but even lenders who employ modern point of sale technology may find opportunities for improvement.

When you look at all of the steps and individuals involved in loan manufacturing, it’s easy to see how inefficiencies, miscommunications, and extraneous touchpoints can creep into the lending process. After the record-high volume of 2020 and 2021 declined, you undoubtedly noticed your per-loan economics slip as subsiding demand exposed process weaknesses. And yet due to many hands in the process, it’s not always clear where bottlenecks lie.

To drive a fully optimized lending process, you need reliable, real-time insights that give a full view of the loan funnel, exposing gaps and areas of concern. This way, you can ensure the efforts you deploy to tighten up your operations will be spent wisely, resulting in real benefits to your bottom line. Instead of relying on anecdotal observations, you’ll make process improvements with confidence, knowing you’re building an airtight system that supports profitability.

The only issue? Many lenders lack the comprehensive data analysis they need to confidently improve their processes. Without robust internal analytics tools, these lenders typically settle for unscalable spreadsheet exercises, partial data imports that are difficult to analyze and reproduce, or expensive third party tools like Tableau that require significant resources to configure and deploy. The result is unmet reporting needs, where lenders reactively focus on origination problems instead of proactively leveraging data and insights to optimize their production and operations activities.

That reality is rapidly changing, though. With new solutions such as Maxwell Business Intelligence, which offers turnkey reports to help maximize back-office efficiency and optimize resources, lenders can gain key insights into their businesses. These insights help identify loans at risk with a view into processing speed, loan file quality, processing capacity, and team utilization. The result is actionable, immediate analytics at a fraction of the cost of maintaining an internal data infrastructure and team.

Driving data accessibility with AI

Within the Business Intelligence solution, Maxwell has embedded industry’s first chat interface to mortgage data called AskMax. AskMax leverages state-of-the-art artificial intelligence to make analytics even more accessible to lending teams. Acting as a data concierge, AskMax provides answers to loan-related questions in straightforward, plain language. If your Head of Production, for instance, wants to dig into loan officer performance, rather than pulling individual reports, she could simply prompt, “Show me the top 5 loan officers by volume in 2023.” In another example, if your Head of Operations wants to dig into operational efficiency, he could ask, “What percentage of loans took more than 30 days to close last month?”

Similarly, AskMax can provide actionable insights across a host of topics, with a few example queries including:

  • Show me the top 5 loan officers by number of closed loans in 2023.
  • How many applications did we receive last month?
  • Show me the total assigned loans by loan processor last quarter.
  • Do we have any locks expiring soon?
  • What was our pull-through rate between “application submitted” and “loan closed” over the last 12 months?

Not only can AskMax offer instant, easy-to-digest answers to questions like these, but it renders charts and graphs when appropriate to visualize the data in shareable formats, with views users can save and revisit as necessary.

“The mortgage industry is just beginning to leverage the transformative power of AI,” says Rutul Davé, Maxwell Co-founder and CTO. “AskMax is a compelling example of how AI can act as a copilot and concierge that empowers lending professionals with deeper insights, allowing them to build a better, more efficient mortgage process. As costs continue to rise and market challenges persist, real-time, reliable data with easily accessible, actionable insights will become table stakes for any lending business’s success.”

Get your free copy of The 2024 Lender Playbook: 4 Tips to Drive Profitability in a Recovering Market

Want to get more advice on how to drive down costs and improve your lending processes this year? Download our new eBook to learn:

  • The reasons why 2024’s path to market recovery won’t be linear, including how this year’s election could impact interest rates
  • How to ready your lending business to capture intermittent volume as it reemerges without the burden of fixed costs
  • Why access to real-time data insights will be a major differentiator in 2024—and how lenders can gain those analytics cost effectively
  • The game-changing benefits of reinvesting in borrower relationships at a time when home buyers need lender support most

Download your copy to get exclusive advice from Maxwell leadership.

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