The challenge: Clearing massive backlogs while improving efficiencies
The client is a private-equity-owned leading US lender that operates in 50 states and supports multi-channel lending. They had a backlog of more than 20,000 loans awaiting issuance of post-consummation CDs and TRID review by the CFPB and state auditors, posing significant regulatory risk for the client. In addition, this backlog had to be quickly eliminated.
The client sought a technology and services provider that could assume control of loan origination in 50 states for multiple loan types across all channels, improving turn-around times while reducing the cost per loan originated. Firstsource was selected by the client to rapidly resolve the post-closing loan backlog and provide loan origination support offshore, and its capability to provide end-to-end support in mortgage operations.
The solution: Transitioning to a right-shore model to drive down costs
Firstsource set up global operations with its Digitally Empowered Contact Center (DECC) solution that combines the best of what humans and technology have to offer.
Firstsource assembled a team with post-closing, origination, and title experience. They were trained in the client’s underwriting practices and the underlying technology used in loan origination. Automated workflows were built to streamline the post-closing process and perform document collection tasks, data quality checks and quality control reviews.
Within six months of the project launch, Firstsource had established core offshore operations with 243 FTEs for origination, title, and post-closing reallocating FTEs employed onshore. The transition occurred during the start of the COVID-19 pandemic, and during a refinance boom driven by falling interest rates.
In the next 12 months, offshore operations supporting loan origination grew to 634 FTEs, or 51%. The title operation expanded headcount to meet rising loan volumes, doubling in size to 30 FTEs. The onshore post-closing team grew to 130 FTEs, and the offshore team by 400 FTEs for a total headcount associated with post-closing of 530; this from a staffing level of 12 the previous year. This ramp-up of labor was managed amid a pandemic and during a period of robust loan origination.
The result: Reducing backlog volumes while delivering significant cost savings
Outsourcing loan origination, title and post-closing has resulted in significant cost savings for the client and rapid resolution of the post-closing backlog. At the time of this writing, annual cost savings are $24M, and growing. The post-closing backlog was completed offshore in 120 days — eliminating a major burden on the client’s operations and its compliance efforts.
In addition, the automation deployed by Firstsource in the post-closing phase is producing loan documentation that exceeds benchmarks, leading to faster shipping times and turn-around of mortgage capital. The client is also meeting regulatory requirements for timely post-closing documentation and reporting. Firstsource is now preparing to expand the use of digital solutions for more component processes and to help the client insource mortgage servicing.