CMBA Interviews Special Agent X About Big Data Industry Trends

October 8, 2020

The team at Special Agent X was recently interviewed by the California Mortgage Bankers Association for an exclusive Member Profile.

The California MBA is the leading statewide advocate for the residential and commercial real estate finance industry, representing its members before all government and regulatory agencies. Headquartered in Sacramento, California, the California MBA promotes fair and ethical lending practices through a wide range of educational programs, services and industry publications.

Here are the questions they had for us about our X-Ray dashboards and big data.

How are companies making ‘big data’ actionable in today’s market?

If we had only had a couple of words to answer this question it would be: Real-Time Visualization. Most data isn’t actionable, and that is a problem.

Most lenders’ data is tied up in their LOS. Rarely, and only if they have the proper admin resources, are they able to create some basic reports from their data.

However, these reports are one-dimensional spreadsheets that simply describe static events. In other words, the information is not structured in a way that allows them to see trends, prescribe fixes and plan for changes. When data is not in real time, it quickly becomes inaccurate so nobody trusts it.

With reports like this you are not taking action on anything, you’re reacting to past events. When you try to remedy this, the first thing that happens is it causes you to be unproductive as you endlessly try to export to Excel and manipulate it. This has to be redone every week so you don’t do it at all.  And then, NOT having the information causes you to make important decisions based on anecdotal information or gut feelings. That is not a recipe for success!

Data by itself does not prescribe any action.

Only by deriving insights from your data, can you develop conclusions that inform potential strategies and actions to take. And the way to turn data into insights is to structure and visualize it in the appropriate ways. By visualizing the data in real-time, you move from static, point-in-time decision making to fluid, ongoing analysis of your business. When this happens, meetings are spent on strategy development instead of validating data.

The end result is that mortgage businesses can build a competitive advantage by reducing the time it takes to get the answers to important business questions, such as:

  • Where is the bottleneck in my loan pipeline and who needs the most help right now?
  • Are any of our loans outside of turn times at any stage?
  • How can I compare key metrics across all my branches and producers at a single glance?
  • How can I manage my loan products and margins so I stay ahead of changes in the market that cause income fluctuations?

Ultimately, the real question here is how many companies are not making big data actionable in today’s market?

How can Special Agent X’s X-Ray platform improve a mortgage company’s efficiency?

Much more than you would ever think! There is a lot of attention on efficiency in the industry and most of it focuses on the consumer-facing side – digital loans and smartphone apps. While these products do have a good place with the right kind of banks and lenders, the end results are often unclear, the investment of time and money is huge, and therefore, the ROI is tough to deliver. Maybe we’re looking in the wrong place to make an impact?

The very nature of the loan manufacturing process means there is a lot of time spent tracking and reporting on statuses and updates. This means that any strategy that could reduce the time spent on these activities is uniquely positioned to make the most impact on your bottom line. Simply put, many mortgage companies don’t know how much time they are wasting on a complete lack of, or faulty, business reporting. It turns out to be quite a surprise for those who actually take a few minutes to figure it out. You can do just that with our X-Ray Dashboards ROI Calculator.

Here’s a recent client example:  A mortgage team of about 20 figured they spent just a few hours each dealing with the needed reports to support their weekly meetings and processes.  Closer evaluation uncovered it was around $18,000 monthly invested.  If that same office is doing monthly volume of $24 million in loans, that means that you are at about 7.5 bps in cost – just for pipeline meetings! Using a smart and real-time reporting/dashboard solution, you should be able to reduce these hours to a monthly cost on time of about $3,100 per month, or 1.3 bps. That is better than an 82% reduction!

It makes sense that those two things above, having control of your data and being efficient, will help you grow, but how can it help with recruiting as well?

Recruiting is a big topic right now across the industry, and rightfully so. There are hundreds of thousands of new loan officers who will need to be added to the workforce over the next 10 years as many older loan officers reach retirement age. The problem is, many mortgage companies are not recruiting in the right ways. A key will be able to show recruits that you are serious about their success by putting technology solutions in their hands. It’s easy to talk about how your mortgage business holds people accountable and how your ship runs efficient.

But is that really the case?

To hold staff accountable and be efficient, mortgage companies need structured data to ensure they are making good decisions.

Are you still running meetings with grease boards? Or, are you using actionable data through a high-tech loan tracking system to have the numbers you need to conduct efficient production meetings? Can you solve office-wide production challenges with real-time numbers? Can your loan officers be on the go and still stay up to date on everything that is going on with the business? This is what the next generation of loan officers and branch managers will expect.

To provide this, mortgage companies should use business solutions that provide data quickly and accurately to be better than the competition, which may have their own strategic advantage already.

Good information is the key.

The best branch managers and producers want to be with a company they know has the technical chops to support them to be the best they can. A company that has the structured data to assist them with the everyday decisions they have to make to be successful, will have a powerful advantage.

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