Net gains in 2021 Q4 declined to $1,099 on each loan originated, compared to $2,594 in the previous quarter, according to a report published by the Mortgage Bankers Association (MBA) on Thursday. This slide-in profitability is on a 6 quarter trend. This is due to softening demand resulting in the slide in the volume of loans. With the feds’ current positions, we don’t see a reversal soon. While the industry is hopeful in the NQM segment that is still to bear fruit, it is difficult to know if it can bring growth across the whole industry.
So what do banks do in these testing times? How do banks navigate the fall in volumes and the eventual rise in volumes while reducing costs and increasing revenues?
Reducing cost – Banks can reduce their fixed and semi-variable costs in their mortgage processes. Identifying bottlenecks in mortgage processing and incorporating technologies that reduce dependence on fixed resources are a couple of ways to meet these objectives.
- Identify bottlenecks: While data is the new Oil, getting data and using that data to solve problems is more challenging than filling up and starting your car. One place you should look to identify bottlenecks is logs in your LOS, IDP or both. This data can help you identify areas and processes that need suitable attention to streamline, which will impact the whole process. The consultants at DocVu.AI build a model around your existing process and use the logs data to show you the visual flow of your processes and recommend areas of improvements that can meet your strategic operational objectives by changing process SOPs.
- Reduce dependence on Manual resources: This is what technology promises, but getting the right results is easier said than done. While AI and ML have promised the next phase of automation, general AI and ML fail in industries that have unique idiosyncrasies. DocVu.AI Mortgage Intelligence is an AI & ML module built ground up to meet the special requirements of Mortgage document processing, which leads to:
- a higher number of Straight-through processing which reduces human intervention,
- better grading of accuracy of AI that reduces human oversight
Today the market is challenging but take this as an opportunity to build capabilities to navigate the future and address today’s trials.
Technology in operations can help fuel your revenues and top line growth.
Learn about how operations can influence the Top Line here.