How Many Loans by Processors?

Alice Alvey President, CMB  Indecomm-Mortgage U, Inc. I have been on a mission asking every customer ‘how many active loans can your processors handle in their pipeline?” As you can probably guess I receive a lot of questions in return trying to qualify the definition of pipeline, processor and if the processor is working overtime. One person asked me if the processor is pushed to the brink and is threatening to kill their manager does that count. So I have to clarify that I am using the term processing pipeline to define loans from the time the originator has handed the loan off to the processor through closing. A processor is one who must utilize automated underwriting, request and reconcile conditions, submit loans to underwriting, resolve underwriting conditions and coordinate the file for closing but does not have to prepare closing documents. The definition of a work week is no more than 45 hours. Well as you can guess again, I get laughter about that vision in today’s world of tight staffing and rates at all time lows. When the definitions are finally settled and reality is separated from what constitutes good management, I am given a number somewhere between 45 and 65. The reality is that some shops have hit over 150 loans per processor today and I recall having 200 myself in the early ’80s! No way you say? Based on my experience in working with lenders, banks and credit unions of all sizes, here are the top three criteria to consider when evaluating processing capacity: 1) Expectations of the origination documentation and quality of automated underwriting (AU) data at origination. Ranked as my number one item to impact processor capacity, the less responsibility the originator has, the fewer files a processor can handle.  I have seen processors struggle with as few as 30 files in their pipeline when loan quality is low.  Companies who require the originator to obtain all initial conditions on the AU findings can push beyond the 60 file mark but without originator accountability you can drop that range to 35-45. 2) Using a Loan Origination System (LOS) to its full potential and having the right LOS ranks as number two on my list.  When the staff doesn’t utilize basic system features such as status, tracking, comments, and reports there isn’t a mortgage process or accountability.  In order for a processor to work effectively above 40 files, there must be solid policies and procedures that utilize all the functions available in every LOS. 3) Processors dedicated to an originator or team (with good volume to justify the costs) can process more loans than those who are faced with random originator’s files.  But remember rule number one above.  Quality must be enforced even with the top originators. Obviously the processor’s organizational skills play a big role and going paperless alone adds efficiency to the entire mortgage process but that does not necessarily increase an individual processor’s capacity.  To hit the high numbers it takes quality originations, a lot of overtime and a paperless environment combined with task management and a reduced scope of work.  It is critical to recognize that one size does not fit all. Every company will have varying expectations and limitations to optimize the role of the processor.