Stop extinguishing fires and start improving your process

All loan amounts being the same, would you rather have five deals clear to close right now, or 25 preapprovals?

Most of you would take the five as opposed to the 25, right? After all, a bird in the hand is worth two in the bush. But according to Adam Batayeh, president of digital mortgage company Lodasoft, the reason you would rather have the five deals is because you’re not confident enough in your process that you close all of the 25.

During a session at the Originators Connect conference in Las Vegas, Batayeh said that the key to closing loans faster and more efficiently, and being better at organization, communication, and client retention, is in the process. Where is your process falling short?

“Take yourself out of the daily grind of mortgage, and tell yourself that I'm a loan manufacturer. At the end of the day, we are in the manufacturing business,” he said.

From gathering documents to ordering appraisals, there are hundreds of different pieces that go into doing a loan. If you look at each of those individual items as sub-assembly, or as a mini process that’s part of your overall workflow, you’ll start to learn how much time is wasted in your process through small flaws. Maybe it’s just a few minutes here and there, but over the course of the loans that you close in a month, the time adds up.

Once you’re looking for these flaws, you’ll be able to constantly improve your process every day, and you’ll start to see the things that are repeatable throughout your process and implement them across the board.

The mortgage industry is no different than many other industries that are out there, Batayeh said.

“I don’t know why we act as if we’re this anomaly. I hear it all the time [from clients]: ‘You don’t understand. The borrowers I deal with, you don’t understand, the loans that I do, it’s just a constant grind.’ I do understand, I promise,” he said. “The difference is, you’re proud of that. You’re proud that all of your files, all of your borrowers are different. And what we should do is look at it and say, we’re all doing the same type of thing here.”

A common flaw in the process occurs when you get a phone call or an email with a problem that needs to be solved. Maybe a client needs reassurance or a partner needs a document, which requires you to call someone else to relay a message or put a note in your LOS, and if you don’t solve the problem immediately, you think you’ll lose the deal. At best, your focus becomes scattered, at worst, your process becomes chaotic, and you eventually look back at your day and realize that much of your time was spent putting out fires as opposed to propelling your business forward. Week after week, month after month you’re running into the same issues.

It’s hard to step out of the situation and realize that maybe your process itself and the way the file was handled from the beginning is responsible for the chaos. When evaluating your fires, Batayeh advises thinking about them in terms of categories, or buckets. Determine whether it’s a regular occurrence or an anomaly, and the bucket will determine how you adjust your process.

“I don’t care what your situation was . . . it always ends up falling in some bucket. We use the 80/20 rule. Does it happen on 80% of your files? Okay, then it’s a part of the main assembly line. Does it happen on 20% of your files? Okay, this it’s this thing that we have here that we can account for, but we can put some process to those things that happen 20% of the time,” Batayeh said.

Portals are something that can really help with a lack of organization, and the communication issues that arise during the process. Secure portals that allow you, your clients, and your partners to upload documents saves you the entire document-gathering process altogether, as well as the tedious follow-ups. You’re more organized because you have everything readily available to you, and you also sidestep the distraction of having to follow up for missing or late documents through automated notifications sent to the appropriate parties.

Originators often think of themselves as the centerpiece of the loan, but Batayeh said that it’s important not to lose sight of the fact that the loan is the centerpiece of the deal.

“You, the borrower, the realtor, the processor, you guys should all be working together to figure out how to get that thing closed,” he said. “You’re all working toward that same thing. So it’s shifting that mindset, and it’s usually communication to do that and it’s by bringing in people further upfront.”

Being organized and being able to better communicate with people—notifying your partners in advance of when something might happen or that documents are due, saves a fire from starting further down the road and leads to improved client retention rates. Technology such as secure portals can help with this with minimal effort from you.

“I’m not telling you that you’re not doing these things,” Batayeh said. “What I’m telling you is that you’re doing them, and the system can do it for you.”