July 2, 2010

If you are involved in the mortgage industry today, you probably understand manually pricing a mortgage is similar to working a complex math equation. A number of variables must be factored into the process and, as a result, the process is slow, cumbersome and includes many opportunities for errors to occur.

Mistakes made in the process of pricing a mortgage cost everyone time and money. Chris Gilliam, real estate lending coordinator at $113 million/20,000-member Western Sun Federal Credit Union, Broken Arrow, Okla., explains the complexities of manual pricing.

“Manual pricing from a rate sheet, then faxing or e-mailing the lock request, and then making sure it was confirmed was ridiculous,” Gilliam explains. “Multiple rate sheets throughout the day, and if you missed the e-mail that rates were suspended, you're sunk. I for one had an extremely difficult time with pricing.”

Gilliam offered a scenario to elaborate on the difficulties you might encounter with manual pricing.

“For example, I had members in my office one morning. The rate sheet had posted for the day and we were pricing the loan out with members there, scanning documents, signing the application--the whole nine yards and a really good deal for them,” Gilliam says. “The whole appointment took a good hour and a half, but was well worth it.”

“Then the problems came. The lock I faxed in after we were through was locked on a new rate sheet that had been sent out during the time of our appointment,” Gilliam says. “I was unaware of this since I was not checking e-mails in front of the borrower. So, the loan went from par pricing to .375 percent discount instantly, and on a $200,000 loan, that's very hard to explain to a member.”  

As Western Sun FCU’s mortgage lending partner, CU Members Mortgage recognized that improving this complex pricing process could save credit unions considerable time and money by narrowing the margin of error and went to work with Avista Solutions. In 2009, CU Members Mortgage began the rollout of a new Web-based service platform that would better automate the pricing process and offer some additional functions to help wholesale and correspondent partners maximize efficiency and increase profitability.

The new SMARTSuite platform was launched and now credit unions can get a fully adjusted net price to the credit union system user without reviewing a daily rate sheet or calculating complex price adjustments. SMARTSuite also offers a function called ImageFlow, which equips credit unions with the ability to submit electronic loan files for underwriting review. Plus, SMARTSuite’s electronic closing request streamlines the closing document order process. The system is fully integrated so document underwriting, loan processing, and initial disclosures can be ordered and manufactured in seconds.

“The upgrade to SMARTSuite has significantly changed the speed and ease of origination and processing--increasing the overall profitability of secondary market lending for us as a small- to medium-sized credit union,” Gilliam explains. “This automated pricing engine has led to a 150 percent increase in loans closed from year to year since starting SMARTSuite.”  

“In six or seven months it has reduced my days in process by 4 days – that’s enormous!” Gilliam continues. “The automated system has virtually eliminated the need for over-nighting packages  – saving money there as it has greatly reduced the paper usage by having imaging software to upload documents.”

At $354 million/40,000-member Diamond Credit Union, Pottstown, Pa., Mortgage Associate Sandra Stevens has also taken advantage of the new SMARTSuite system.    

“It’s easier and faster to submit files to the underwriter and saves us cost--as we don't have to overnight files any more,” Stevens says. “Our busy borrowers are happy, too, because we can take applications over the phone and send them the app and disclosures via e-doc--which is safe and secure.”

Today’s competitive climate is exceptionally challenging, and a sound business strategy demands the right tools. For Western Sun FCU, Diamond CU, and more than 1,000 other credit unions nationwide, accurate and efficient mortgage lending begins by choosing a solid business partner with technology solutions that produce results.