Reliable quality control has always been a critical aspect of any lending business. A dependable pre- and post-close QC process not only improves loan quality and production processes, but it also mitigates regulatory risk and maintains valuable investor opportunities. If you’ve been in the industry for any length of time, you understand the importance of QC to creating sellable loans—but are you actively deriving tangible business value from your QC process?
In today’s market, where each loan matters and profitability is far from guaranteed, every single component of your lending process needs to create opportunity for your business. Your point-of-sale solution, for instance, should not only manage documents and facilitate borrower communication; it should empower new business by giving your LOs powerful tools to convert more leads, build more relationships, and close more loans.
In the same way, your QC process should go beyond the bare minimum of validating that loan conditions have been met. Rather, it should lend efficiency, speed, and transparency to your business, ultimately helping you recoup revenue at a time when revenue is needed most.
Opportunity in adverse action
A major way QC can boost your bottom line is simply through its ability to unearth viable loans that may have been erroneously declined. Loans impacted by adverse action usually result in borrower denials. While these loans are often denied for valid reasons, a fraction may be salvageable—a reality never uncovered by many lenders because of inadequate QC. Portfolio loans in particular are susceptible to false negatives and may fall through the cracks.
By employing a thorough pre-notification QC service experienced in loans outside of Fannie and Freddie offerings, lenders can reverse a fraction of adverse action loans, resulting in real, concrete benefits to the bottom line. The 100% onshore talent offered by Maxwell Diligence, for instance, holds an average of 15 years of industry experience across a range of traditional and non-traditional loan types, including non-Fannie and Freddie loans. By channeling deep expertise and leveraging a technology-led platform, our team is able to catch—and reverse—false negatives that otherwise may not be scrutinized.
Speed, efficiency & service
Another way best-in-class QC can positively impact your bottom line is by boosting speed and efficiency. Throughout the lending process, time is money—and while efficiency is critical in any market, when loan volume is slim and competition is fierce, a consistent, nimble process becomes a powerful competitive advantage. This reality holds true within the QC process: If lenders are able to streamline operations, drive down timelines, and meet SLAs, they save money by offloading loans in the secondary market faster and they’re able to build strong, trusted relationships with investors.
Here, both technology and human-led service are differentiators. Maxwell Diligence, for instance, leverages a tech-powered platform that accelerates pre- and post-close QC while offering useful functionality that eases manual tasks. Lenders can save time and effort, for instance, by uploading files for review via a simple API integration. Plus, robust reporting allows for a transparent, predictable review process.
In the same way, having access to a responsive team of experts can be a game-changer for lenders looking to inject efficiency into their QC process. While offshore providers advertise competitive pricing, they often work from across the world on schedules opposite of the lenders they serve. Beyond this discrepancy, offshore teams often lack hands-on experience with the U.S. mortgage process, leading to miscommunication and lost context.
An onshore team versed across diverse loan products, on the other hand, can provide massive value to your lending business through responsive service and robust expertise. Maxwell Diligence’s QC talent, for instance, averages 36 hours for initial reviews and 24 hours to review and clear conditions—timelines that augment your QC process and support overall profitability.
More than a checked box
While QC can (and should) protect your business from regulatory risk, it should do far more than check a simple box. In today’s competitive market, each and every step of your lending process needs to add value and bolster your bottom line. QC is often overlooked as a major opportunity to recoup loan volume and revenue. By leveraging a more proactive, efficient process, lenders can unlock a new business area to support profitability despite market challenges.