save 900,000 hours of effort per year with process mapping.
The underwriting department of a national credit union was struggling. In the midst of an increase in application volumes, the department became highly backed up.
Loans were taking 4 to 6 weeks to underwrite, compared to an average of 1-2 weeks at banks.
These delays were bad for business. Nearly 1 in 5 of applicants withdrew and chose another lender because their process was faster. These delays also shone a spotlight on significant pain points in the underwriting process, detracting from the employee experience, creating disappointing customer experiences, and hindering the credit union’s ability to close more loans each year.
The delays were caused by several factors impacting underwriters:
- They touched each mortgage application an average of 4.2 times due to incomplete information and documentation.
- There were wide productivity gaps, with some underwriters reviewing 2,700 applications per day and others reviewing only 2,200.
- They performed extensive manual reviews of applications, despite 71% of them being approved by Fannie Mae’s mortgage underwriting business rules engine.
- They applied exceptions on a case-by-case basis without uniformity.
The credit union knew they needed help to tackle these issues. That’s where Randstad Digital came in.
First, was the break down of information silos and enabling of shared accountability, collaboration and a high-level view across the enterprise.
Next, performing process mapping to zero in on specific areas of confusion in the processes that result in inconsistent and sluggish underwriting. Finally, making recommendations to improve the underwriting process.
providing a unified, high-level view of the mortgage underwriting process.
Randstad Digital began by developing two, high-level business capability maps that spanned the entire underwriting process timeline.
This helped eliminate information silos and allow business leaders to have a bird’s-eye view of their department and how it interacts with others. This was especially helpful as the credit union had recently experienced a leadership change. It also provided the areas of focus for mapping the underlying business processes later in the engagement.
shortening underwriting times through detailed process mapping.
Next, Randstad Digital took the high-level view and went more granular, holding 58 working sessions with stakeholders to review specific issues in the mortgage underwriting process. From these sessions, they created 50 detailed process maps which not only provided a role-based, end-to-end view, but also provided key metrics, such as how long the process took. These maps clarified processes, procedures, and benchmarks that were sometimes unclear and unwritten.
Business team members now had clear instructions for what to expect from their upstream coworkers, what to do themselves, and what to provide their downstream coworkers. This helped them have the information they needed to execute their role. Additionally, it also aligned the teams around a common method. All of this helped shorten the loan underwriting timeline and service members more efficiently and correctly.
Improving the mortgage underwriting process and shortening loan underwriting timelines.
With our help, the national credit union was able to become more effective, supporting $23 billion in mortgage loan volume that year while shortening its average underwriting time by 1-2 weeks. The credit union was also supplied with detailed recommendations to continue to break down informational silos, rely on defined processes for their operations, invest in operational efficiencies and save 900,000 hours of effort, representing over $22M in savings each year. Moving forward, they are poised to service members efficiently and correctly and solidify their leadership in the mortgage lending space.