Whether it’s $12 or $13k per loan, do you really think that you’re going to markedly lower the cost to produce a loan this quarter? Or next quarter? As Mike Yu, Jeremy Potter, and Sasha Stair discussed Monday, the biggest piece of “cost” is compensation, so unless you’re going to offshore everything, or pay LOs 25 basis points, changes in efficiency, automation, and technology will only take you so far.
As Mike said, "You cannot add technology without subtracting something else and expect costs to change." Yes, there’s some room for cost improvement, and, as LOs know, also ... many costs are not within a lender’s control, similar to home “affordability” costs also include insurance, HOA fees, or property taxes.
If you cannot immediately lower costs, has your customer experience, given how complex a home loan is, improved when compared to other lenders? In a commodity business, the question must be, “Are lenders measuring the right things?” Operational costs and sales/marketing are the two levers lenders do control. Lowering a lender’s marginal cost is important… how is your accounting department measuring it?
Lenders are great at considering new processes, new meetings, and therefore costs, but what about eliminating tasks or eliminating steps, cutting touches per loan, removing meaningless meetings from calendars, and so on? If you are not projecting to subtract something along the way, how are you going to cut costs? How will you achieve additional profitability or sales opportunity?
Some lenders are turning to AI to do just that: cut marginal cost and increase productivity without adding more headcount. For example, Insellerate’s Aithena, for example, is helping lenders lower compliance costs, uncover missed opportunities, and boost LO productivity with real-time AI insights. CEO Josh Friend noted, “Lenders are great at considering new processes, new meetings, and therefore costs, but what about eliminating tasks or eliminating steps, cutting touches per loan, removing meaningless meetings from calendars, and so on? If you are not projecting to subtract something along the way, how are you going to cut costs? How will you achieve additional profitability or sales opportunity?”