Case Studies » Leading National Credit Union

Improving the mortgage underwriting process

Breaking down silos and shortening the underwriting process timeline

Using process mapping to help save 900,000 hours of effort each year.

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 as applicants would sometimes get impatient and drop in the middle of the mortgage underwriting process to go to a new lender. Nearly 1 in 5 of these withdrawing applicants 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 individual 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 while others reviewing only 2,200.
  • They performed extensive manual review 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 called Celerity in to tackle these issues in three distinct ways. First, by breaking down information silos and enabling shared accountability, collaboration and a high-level view across the enterprise. Next, by performing process mapping to zero in on specific areas of confusion in the processes that result in inconsistent and sluggish underwriting. Finally, by making recommendations to improve the underwriting process.

Services

  • Process documentation
  • Process mapping
  • Process optimization
  • Robotic process automation

Services

  • Process documentation
  • Process mapping
  • Process optimization
  • Robotic process automation

Using process mapping to help save 900,000 hours of effort each year.

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 as applicants would sometimes get impatient and drop in the midst of the mortgage underwriting process to go to a new lender. Nearly 1 in 5 of these withdrawing applicants 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 individual 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 while others reviewing only 2,200.
  • They performed extensive manual review 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 called Celerity in to tackle these issues in three distinct ways. First, by breaking down information silos and enabling shared accountability, collaboration and a high-level view across the enterprise. Next, by performing process mapping to zero in on specific areas of confusion in the processes that result in inconsistent and sluggish underwriting. Finally, by making recommendations to improve the underwriting process.

Providing a unified, high-level view of the mortgage underwriting process

Celerity 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, Celerity 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 had sometimes been unclear and unwritten until then.

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 Celerity’s 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.

Before Celerity

mortgage underwriting process4-6 week loan underwriting timeline

mortgage underwriting processTechnology unaligned to business needs

mortgage underwriting processSiloed inefficiencies

mortgage underwriting processUndefined processes

With Celerity

mortgage underwriting process3-5 week loan underwriting timeline

mortgage underwriting processTechnology readied for alignment with business needs

mortgage underwriting processDepartment-wide business capability view

mortgage underwriting process50 mapped business processes

Leading National Credit Union

Realizing the benefits of automation

Leading National Bank

Process mapping

Leading National Bank

Process analysis