Improving the mortgage underwriting process

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.