Weighing the benefits of partner resourcing or retaining processes in-house.

Here is a criteria checklist to help lenders.

Whether it’s a decision to try and fix that rattle in your car or send it to the mechanic; to paint your new home or hire a painter; or better still, to take down that tree that’s leaning too close to the house (yikes) or do it yourself (double yikes) – the decision to let someone complete a function you can likely do yourself or your company can do internally is a decision that’s often tied to mixed emotions.

In most outsourcing decisions, it comes down to time and quality.  Lenders who choose to outsource origination tasks often do so to focus their professional staff on processes that take advantage of their specialized training and in-house presence.  Additionally, a bonus for choosing to outsource is quality control and service levels are more easily assessed and applied to external resources than internal team members where personal relationships can make assessment more challenging.

Here are a few conditions to consider in your evaluation of a vendor partner resource over retaining the process in-house.

OUTSOURCE CRITERIA CHECKLIST:

✓ More cost-effective than in-house resources.

Solution providers specialize in the tasks performed (efficiency) and often employ associates at a cost structure specific to the limited set of functions performed.

✓ Reduces lender infrastructure costs.

Lenders retaining processes in-house require additional space, IT, HR and management resources for growing enterprises.  These costs are often better managed via a single solution provider for multiple solution offerings.

✓ Offers a variable cost model.

In-house resources are a fixed cost – if closings go down or application fallouts go up, production costs remained fixed; whereas solutions providers are a variable cost model. Lenders only pay for the units requested.

✓ Preferred fulfillment support processes and feature advantages. 

A solution provider invests hundreds or thousands of development hours into the specialized work functions they support.  These result in focused systems, data sources and work processes a lender will likely find challenging to cost-effectively emulate and support.

✓ An unbiased resource in the lending decision.

Origination service providers have no incentive to influence the outcome of the lending decision.

✓ Offers greater volume flexibility than in-house staffing.

Solution providers like NCS daily manage hundreds or thousands of clients and have the capacity to absorb volume fluctuations with no additional cost to the client.

✓ Emulates in-house fulfillment with engineered granular transparency and end-user control.

A highly valued asset of in-house processing is direct control and visible oversight over processes and work product.  NCS’ VOE solution provides transparency via multiple and reportable transaction statuses, plus processing and integration options to tailor the solution to the lender.

✓ Best practice third-party oversight is now commonplace in the mortgage ecosystem.

Lender’s risk management of vendor resources (vendor management) is much more refined, documented and compliant with regulatory guidelines (OCC, CFPB, FDIC, etc.) A vendor’s data management protocols are commonly called out via questionnaires, such as SIGs (Standard Information Gathering) documents prior to transacting business.  Additionally, lender’s vendor management teams have grown to meet their operation team’s demands for onboarding solution providers.

If one or several of these categories resonate with you, let’s get together and work out a solution that best positions your firm for success.

At SERVICE 1st, we make it easier to originate a mortgage. Your success is our commitment.