NMP - September 2016 - 83

establishes a productive relationship with investors and the warehouse provider and enables emerging mortgage bankers to rise up the ranks to achieve full-fledged mortgage banker. While the mortgage bankers have been hesitant to adopt eMortgage strategies, they are not pessimistic about the future of the eMortgage in mortgage banking. In the Xerox survey mentioned earlier, more than half of all respondents said they believe eMortgages will account for at least half of all loan production within four years, which is a nearly 55 percent increase over responses to that question in 2014. Clearly, the industry sees the value in digital origination, even if it hasn't implemented it in full force. For the forward-thinking, aspirational-minded mortgage broker, now is the time to make the digital leap into mortgage banking. Jeff Bode is owner and CEO of Addison, Texas-based lender Mid America Mortgage Inc., which operates in the retail, wholesale and correspondent lending channels. Jeff can be reached by e-mail at Jeff.Bode@MidAmericaMortgage.com. 83 H HOW DID YOU HEAR ABOUT OUR 3% DOWN PROGRAM, THE FACEBOOK VIDEO OR ONE OF THE RADIO ADS MY MARKETING TEAM CREATED? D? - YOU n National Mortgage Professional Magazine n SEPTEMBER 2016 turn times and eliminates the errors associated with manual, paper-based lending. Of the two kinds of warehouse relationships, mandatory delivery is the far more profitable of the two for the mortgage banker. The major deciding factor in transitioning from best-efforts to a mandatory delivery engagement is the emerging mortgage banker's ability to demonstrate operational efficiency, sound fiscal management and foundational understanding of mortgage origination-all of which can occur much more easily when digital origination strategies are used. Once the type of engagement has been established, the emerging mortgage banker must turn its attention to managing the warehouse pipeline. What digital origination strategies can offer in this regard is the ability to dramatically decrease the number of days loans sit on the warehouse line between closing and purchase. Not only does this save money in the form of reduced interest and fees, but it also enables the emerging mortgage banker to do more with less. For example, an emerging mortgage banker with $250,000 in net worth could secure a warehouse line worth roughly $3.75 million. Because most loans sit on a warehouse line for around 20 days due to the inefficiencies of the current origination process, the banker has to be conservative with how much of the line is used at any given time. By leveraging digital origination strategies, including eNotes, this same mortgage banker could achieve the same volume using a warehouse line one-fifth the size (i.e. $750,000) because of the potential to reduce that turn time from weeks to a day or two. To put it another way, that mortgage banker could originate five times the volume without needing an increase in their line of credit. That kind of efficiency and success is what NationalMortgageProfessional.com beginner at something, having the time to self-correct can mean the difference between success and failure. When a correspondent lender can submit their loan file information to the investor electronically, that gives the investor more time to review the loan prefunding, and should errors be found, the lender then has time to address the errors before reaching the closing table and potentially having the investor reject the loan. Furthermore, most eSignature platforms have built-in quality control mechanisms to ensure every document is signed where and how it should be, and with eClosings, all closing documentation is stored electronically, thus jettisoning several menial post-closing tasks that can have significant implications for compliance. If expenses and compliance represent two of the three legs emerging mortgage bankers need in order to succeed, managing relationships with investors and warehouse banks is unequivocally the third. Metrics such as loan quality, pull-through rates and days on the warehouse line must be continuously managed to ensure small issues don't become larger problems that negatively impact these critical relationships. As previously mentioned, digital origination technology can have a demonstrable impact on loan quality, but, it can also aid in pull-through and warehouse line management. Most warehouse banks will start off with a best-efforts engagement with emerging mortgage bankers, as not every broker is able to make a successful transition into mortgage banking. As the emerging mortgage banker is able to achieve high pull-through rates and demonstrate consistent loan quality, they will garner better pricing, though those incentives are going to be capped. Digital origination strategies aid in achieving a high pull-through rate by creating a lean, fully optimized origination environment that supports quick http://www.NationalMortgageProfessional.com

Table of Contents for the Digital Edition of NMP - September 2016

Table of Contents
NMP - September 2016 - Cover1
NMP - September 2016 - Cover2
NMP - September 2016 - 1
NMP - September 2016 - Table of Contents
NMP - September 2016 - 3
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