Real estate loan processing is not fun to most loan officers. It is time consuming and very repetitive. Some loan officers try to deal with the paperwork themselves. They feel like they can make more money by keeping an extra $500 or so and processing it themselves.
"You Can't Make $100,000.00 Doing $10.00 an Hour Work"- - Rory Fatt
The most valuable use of time for a loan officer is finding new loans not real estate loan processing. It takes 6-10 hours of loan processing time to get a loan funded. How much marketing and selling could have been done in that amount time? How many new loans could have been generated? If an average commission is $3000 - $5000 per loan, how much are those new loans worth compared to the extra $500 earned by processing the loan themselves. My grandpa called this stepping over dollars to pick up pennies.
Real estate loan processing also requires a great skill set to do well. While many loan officers and even processors think that processing is just collecting paperwork, a great processor really pre-underwrites the file and resolves issues before underwriting. More than 2-4 prior to closing conditions on most of your files and that is usually a sign of poor processing. As technology allows lenders to keep better databases, many are beginning to hold brokers accountable for quality and how much a loan officer costs to do business with. Current technology has allowed lenders to send a different rate to bad loan officers. Send in poorly processed loans or kill their underwriting department by constantly piece mealing conditions into them and they can make you pay with higher rates.
You can hire an in-house processor to process your real estate loans but that is expensive and a fixed expense that you have to pay no matter how many loans you fund. It also takes a lot of time to hire, train and manage staff. Another less expensive and less time consuming option is a real estate loan processing service or company.
Not all real estate loan processing companies are equal. Find a contract processing company with the best experience, skills and service available. How fast do they work on your files, return your calls and what kind of quality processes do they have in place to deliver high quality files to your lenders? Don’t worry about local vs. national or about fees as much. With technology today it is possible to work with a remote processing smoothly. Cheap is not the answer either because a good real estate loan processor will get your commissions paid faster, close more of your hard loans and earn your more referrals. Bottom line is a serious loan officer must take their real estate loan processing solution very seriously today.
