Outsourcing Mortgage Operations

Updated: November 17th, 2021

At MCT, we are often asked by our clients “How can I be more profitable?” outsourcing mortgage operations

As your capital markets partner, we strive to help you maximize profitability. Our hedging strategies drive revenue, while outsourcing is a strategy used to reduce expenses while also improving processes.

Outsourcing is an effective tool to give mortgage professionals a competitive advantage by saving time and cutting operational costs to make their businesses more profitable.

We hope to provide clarity on this solution by summarizing the discussions of industry leaders in our recent complimentary national webinar on Outsourcing Mortgage Operations.

In this live webinar recording and recap, you will learn a specific model for leveraging outsourcing in all stages of the mortgage origination cycle and why outsourcing is a tool of the largest mortgage companies and aggregators.

About the Outsourcing Mortgage Operations Discussion Webinar

The discussion on outsourcing began at the most recent MCT Exchange conference in September, during the Outsourcing Mortgage Operations Panel Discussion. This panel featured MCT clients disclosing their successes and challenges related to the practice.

To give breath to this important topic, together with Verity Global Solutions and Victorian Finance, this webinar was organized to explain further how to effectively leverage outsourcing and answer remaining questions.

These two companies are relevant to our discussion as Verity Global Solutions provides outsourcing services to Victorian Finance. In this webinar, we gave both parties an opportunity to tell their story of success about how the outsourcing process has worked for them.

Speakers:

Sonny Bringol, President at Victorian Finance

Natalee Young, VP Post Closing Operations and Business Optimization at Victorian Finance

Victorian Finance is a mid-sized mortgage company and an MCT client for many years. President, Sonny Bringol, started Victorian Finance, LLC in 2003 to help Pittsburghers achieve the American Dream of homeownership. He has expanded that achievement to more than 13 states and 20 offices.

Sam Mehta, Verity Global Solutions

Verity Global Solutions is an outsourced solutions provider specializing in the mortgage industry that works with several of MCT’s clients. Verity Global Solutions is based out of San Antonio, TX with offices also in Mumbai, India and Pune, India, offering clients significant advantages of both a value price point and the utilization of different time zones to maximize productivity.

Host/Moderator:

Bill Petersohn, Mortgage Capital Trading

Mr. Petersohn is the current Managing Director and Business Intelligence Lead at MCT. Mr. Petersohn is a former director of GMAC Bank in the Bulk Acquisition Group where he was responsible for National Accounts and Bulk Sales and Operations. Prior to GMAC, Mr. Petersohn spent eight years at GE Capital Mortgage Services as an IT auditor, due diligence coordinator and a servicing valuation analyst and servicing trader.

Questions answered by this webinar:

Should I outsource mortgage operations?
What are the benefits of outsourcing?
What are the challenges of outsourcing?
What are the best parts of the mortgage origination cycle to outsource?

Outsourcing Mortgage Operations Discussion – Live Webinar Recording

This webinar recording will allow you to view the entire discussion even if you were not able to attend. For a quick summary of the hour long talk, please read on below.

Download Webinar Materials

Recap & Summary: Outsourcing Mortgage Operations Discussion

Beginning the webinar, Sonny Bringol began immediately to recount his discovery of outsourcing as a competitive tool that should be viewed with the same eagerness of adoption as automation with LOS integrations.

In his investigations with the largest mortgage companies and aggregators, he soon realized that all of the companies to which Victorian Finance would sell their loans were using hundreds of thousands of outsourced associates in India.

The more that he realized this was a normal practice, the more committed he was to utilizing the process of outsourcing. He explained, “If I am going to compete against [companies utilizing outsourcing] and be successful, and achieve the things that I want, then I have to look into utilizing [these resources] as well.’”

Three of the most common concerns and solutions discussed were:

Concern: Clients want to speak with American-English-speaking associates.

Solution: In this model, the objective was to avoid clients speaking with associates that had strong Indian accents and were obviously working in another country. In practice, the loan originators would not even know that some of their mortgage loan origination process is being outsourced unless they are told by the mortgage company staff. This specific model ensures that there is only verbal communication coming from the internal staff instead of outsourced resources. This seamlessness in customer service engenders the optimum discretion while utilizing outsourcing for operational efficiency.

“One of the important aspects of our model with Verity is we are strictly behind the scenes. We don’t contact anyone outside of your organization. The idea is that the company can keep the look and feel of your company, keep your culture from an external standpoint, and we become an assembly line setup behind the scenes.” – Sam Metha, Verity Global Solutions

Concern: Staff may give some push back as they are concerned with job security.

Solution: Contrary to popular belief, reducing the cost of operations helps businesses to be more competitive, therefore it does just the opposite of what is expected – it creates job security. The same is true with automation as reducing the workload of a team member should be looked at as a plus. The way that outsourcing is easily presented to team members is demonstrating how outsourcing is just another tool to give the mortgage company an advantage, and to free up extra time that can be better spent to make a company more profitable.

“It’s just another one of our tools in our tool bag to be more efficient in providing a more competitive product for our clients and to be successful in this industry. “ – Sonny Bringol, Victorian Finance

Concern: Training the outsourcing staff will be time consuming and may not ensure efficiency.

Solution: Outsourcing is a tool to save time and increase efficiency. Also, outsourcing can be catered to your business’s specific needs to reduce the risk in disrupting the flow of normal business processes. Take the example in the quote below that exemplifies how outsourcing can improve operational efficiency with minimal training and saves time.

“I’m the one who was processing the purchasing advices and some days it would take up my entire day. It took a couple training sessions and now they upload all the purchases advices which is nice because now in the background I have different reports that I can run. Now I can go in and review them and I don’t have to spend my entire day processing them. “ – Natalee Young, Victorian Finance

Audience Q&A

Question: What are you outsourcing? All underwriting, processing, closing, funding?

“Our key thing is we are a referral-based purchase-oriented regional mortgage bank, and we close on time, so I didn’t want anything to mess with our process closing on time. So the first place we tested this it was in post-closing operations so that if there was a delay of a couple days it wouldn’t have affected our customer service delivery levels. So we tested it first in post-closing. Verity took that over for submission to our investors. Very quickly we learned we didn’t need as many post-closers and then we retasked those post-closers to other. We gradually migrated Verity through the organization. Then we did quality control check. Then we did it in all other areas, I can name a few – processing, underwriting, disclosure desk, appraisals. They are a permanent part of our toolkit that we use to help improve operations and apply anywhere where we can improve upon.” – Sonny Bringol, Victorian Finance

Question: What training was involved to get the outsource staff up to speed, getting them accustomed to your processes?

“We started using Verity in post-closing and really the training didn’t take that long. We did a couple training sessions, we always do a GoToMeeting and we record it. Then we send the recording to Verity so they can save it and then go back and reference it as they need to. We started getting them trained on our post-closing checklist. So once the title comes back from the title company, they would go through all the documents that we had uploaded to Encompass, go through our checklist and put the package together to submit to the investor once the loan was committed. At that point I just had the post-closers spot checking a lot of different packages. We made some tweaks here and there but probably within a month or so we didn’t have to check anything anymore. We don’t have any issues with the packages that we submitted. From there we started training them on purchases advices. At this point in post-closing we have them submitting all the FHA insurance applications and we are working on getting them trained on going through and pulling all the insuring documents and getting them uploaded to Encompass or emailing them directly to the investors that need them.” – Natalee Young, Victorian Finance

“In terms of the capabilities at Verity, we have extremely experienced people, we have team leaders, etc, that are extremely familiar with the agency guidelines, all the different tasks involved with the manufacturing alone. In terms of the actual tasks we don’t need any onboarding. What we do is we start with some test loans so we can integrate and understand the customer’s processes and we are ready to roll pretty quickly. We say maybe two weeks to do some test loans and work out any of the kinks between the customer’s processes and our understanding of them. Within 60 days we will be up to the desired efficiency. – Sam Metha, Verity Global Solutions

Question: How are you handling the laws such as New York cybersecurity law, which is extremely detailed and restrictive to what can and can’t be done?

“We rely on compliance professionals to provide this guidance and we have had no trouble adhering to local guidelines with their support.” – Sam Metha, Verity Global Solutions

Question: Do the clients and realtors deal directly with outsourced folks? Or do in house processors still exist to communicate directly with borrowers and agents?

“No, Verity’s team interfaces exclusively with in house staff at Victorian. Realtors, Loan Officers, and customers never interact with our outsourced support.” – Sonny Bringol, Victorian Finance

Question: What rep and warrant protection is offered as far as exposure resulting from mishandling by Verity?

“There are strict contract stipulations for work-related errors and losses. Contact me for more details.” – Sam Metha, Verity Global Solutions

Begin Outsourcing with Non-Time-Sensitive Tasks

If you are ready to take the plunge and try it out for yourself, one speaker recommended that you begin training an outsourcing resource on your post-closure processes because it is a great way to test the resource without affecting time-sensitive deadlines. Quality control and accuracy of data are generally the best fit tasks when outsourcing your mortgage operations.

There is low risk and much to gain with having this extra “tool in your toolbag” that you will use to gain an edge over your competition while increasing profits.

Please contact MCT for more information about this model of outsourcing or if you’re interested in learning about ways to mitigate risk or increase profitability.