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Top 10 Mistakes Of Underperforming Lenders: #7 – #10

JG - p3Our recent webinar featured industry veteran Joe Garrett discussing the Top 10 mistakes of underperforming mortgage lenders. Here are mistakes #7 – #10:

7.)   They do not have budgets

Budgets offer several useful metrics for managers. Foremost, they provide a quick and easy way for managers to identify deviations between expected and actual performance. Any deviations uncovered can be addressed in a timelier manner; a benefit that many underperforming lenders cannot realize as they operate without budgets

8.)   Internal audits do not exist

A lender could have the strongest processes and most trustworthy employees, but failing to conduct internal audits can put the lender at risk. Underperforming lenders tend to not understand this risk and commonly do not conduct internal audits.

 

9.)   They do not know their Hedge Rates or Shock Analysis

Underperforming lenders frequently do not have a good handle on the percentage of their loans that are covered or uncovered (Hedged Rates). And, in conjunction, are uncertain of the amount they would lose if they do not sell at the price they expect (Shock analysis). Of the 10 Mistakes highlighted in this webinar, this is the most surprising. Not knowing the price for which you will be selling your product makes it difficult to manage both costs and profits.

 

10.) They do not track concessions

Together with #8, lenders that fail to track concessions are putting themselves at risk. Not only from a financial perspective, i.e. how large are the concessions, but also from a compliance perspective. Who were concessions given to and why? Did you favor one class over another? By not tracking concessions and understanding to whom and why they are given, underperforming lenders are exposing themselves to potential lawsuits.

See all 10 Mistakes HERE and join us on March 29th for our next free webinar Registration Form
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