The more you know about any job or business venture, the more likely you are to be successful. This month, we explore the pros and cons of mortgage processing for both in-house processors and contract processors.
Rewards of In-House Processing:
1. Abundance of training/continuing education resources 2. Management support for processing problems or conflict resolution 3. No overhead or business paperwork (i.e., accounting) 4. Your professional profile is enhanced from your employer’s status in the industry 5. Free or reduced costs for association and organization memberships 6. Pre-determined hours 7. Employee benefits (health, dental, vision, employee assistance program, tuition reimbursement, etc.) 8. Possible expense reimbursement(meals,travel) 9. Specific and/or limited responsibility 10. Performance incentives and bonuses 11. Retirement or pension plan 12. Part of a team (support, conversation, friendship) 13. Recognition of accomplishments 14. Professional (and visually appealing) work environment 15. High capacity equipment 16. Access to the latest technology 17. Set salary with periodic increases 18. On-site or readily available technical support 19. Other indirect benefits – Desk person to screen calls; fax and mail sorted and delivered
Rewards of Contract Processing:
1. Flexibility in work hours to allow for lifestyle preferences, i.e., childcare, college, family time, church, exercise/recreational activities, hobbies, etc. 2. Flexibility in work location (home, satellite office, virtual office, or other) 3. More opportunity to form independent relationships with lenders/vendors 4. Freedom to choose brokers and originators you process for 5. Personal satisfaction tied to business success 6. Ability to determine the type of services included in standard processing 7. Freedom to explore new territory or projects 8. Ability to obtain continuing education as needed 9. Ability to process loans nationwide 10. Ability to have higher earning capacity based on your services offered and the territory covered 11. Ability to match compensation with the size of the project or difficulty of a file 12. Building a client base 13. Tax deductions for business expenses 14. Ability to provide jobs for others 15. Ability to standardize procedures 16. Ability implement process improvements quickly 17. Ability to grow the business at your own pace 18. Tremendous personal and professional growth 19. Opportunity for financial independence
Challenges of In-House Processing:
1. Growth stifled until management feels you're ready 2. Difficulty getting time-off for vacations or other personal needs 3. Lengthy chain of command or lengthy process for implementing change 4. Inadequate compensation and/or benefits
Challenges of Contract Processing:
1. Capital requirements to run your business 2. Isolation 3. Long and sometimes unpredictable work hours 4. Total or significant responsibility for all facets of processing (marketing, processing, payroll, etc.)
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INDUSTRY NEWS
Hearings for a new Senate bill designed to provide strong regulation for GSEs Fannie Mae and Freddie Mac are set to begin this month. This controversial legislation is a top agenda item for this session of Congress. The two GSEs currently dominate automated underwriting systems for the conforming mortgage market.
--------------------------------------------- QUESTION OF THE MONTH:
Q. I am a home-based contract processor. This eliminates childcare expense and allows me to transport my children to and from school. I plan my day each morning. However, I always end up spending the day addressing issues that arise from phone calls, e-mails, and faxes rather than working my pipeline the way I planned. It seems like the day is running me rather than me running my day. Any suggestions?
A. Yes. Since you plan your day, you are already off to a good start. Now you just need to manage your workday better. TAKE ADVANTAGE OF THE HOURS IMMEDIATELY BEFORE OR AFTER YOUR OFFICIAL HOURS OF BUSINESS. For example, if you open for business at 9:00 AM, start your workday at 7:30-8:00 AM. During this time, review your files to make sure that all conditions are being addressed timely. Here are a few other tips for using this time wisely:
1. Send out as many faxes and e-mails as you can. They transmit faster at off-peak times. 2. Make calls to businesses that open early (i.e., verbal VOEs and Title Company calls can be made between 8:00 AM and 9:00 AM). 3. Try to anticipate the calls that may come in and have information handy to address the caller’s inquiry. 4. Leave a message for any situations that do not require direct contact. 5. If you work on the east coast but have lenders on the west coast you can try reaching them after your official business hours. 6. Likewise, if you are on the west coast working with an east coast lender, you may want to get up a little earlier to take care of your file issues.
As you begin your workday, prioritize new tasks with the old. Establish a standard turnaround time for document review. For example, supporting file docs received before 1PM will be reviewed the same day. Docs received after 1PM will be reviewed by 10AM the next business day.
With a few minor revisions, the day should go much smoother.
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