Bifurcation of positions is just a fancy way of saying that the job expected of one person has become way too much, and you need to reassign who does what. For our industry this means the Underwriter’s position needs bifurcation. Or more precisely defined it need multi-bifurcation, because this job is more than two people can handle in today’s regulatory world. This does not mean a contraction of personnel. Quite the contrary, it means an expansion of personnel that keeps highly qualified people in their highest and best use, while giving others opportunities to grow, while costing you less!
There are over 30,000 pages of regulation and as mortgage lenders we expect one guru underwriter to know it all? That means that every company has to pay big dollars for multiple guru’s instead of one guru to oversee the department of specialists. Just step outside of our world for one moment into another business and you will see what I am talking about. Even attorneys specialize in parts of the law, yet we expect underwriters to be experts in all of the new regulations? This is not efficient, nor is it logical to continue to proceed down the road we have always gone. When things change so should our business methodology especially when it costs us too much money. Not to mention the fact that this is a great way to get younger people into our industry. We are not getting any younger folks and if you look around your organization you will see we need a plan for younger people who can infuse newer ways of doing business into our business.
No one expects that this transformation occurs overnight; yet as profits drop this issue will become more and more important. Here are some things to consider for the QM/ATR as you work to gain profit through efficiency. Doing this right means no one loses a job and you don’t have to expand and contract your employee base continually!
_____ How can you segment the function of underwriting that will be more efficient, cause less mistakes, and result in an overall drop in cost to underwrite, without burning out your staff? To get started, consider developing experts in the following:
•Credit & Income
•Fraud & Compliance
•Self-Employed Income Calculation
_____ Now, take the specific guidelines and turn them into checklists. I’ve added a link to this article which has a great PDF of what should be in your checklist. The CFPB loves checklists so you should too! They demonstrate consistency and fairness in underwriting, as well as serve as a reference piece for any future questions or exams. Checklists also keep everyone on task, focused and more efficient. This is a great way to demonstrate underwriting equality versus underwriting disparity.
_____ The head of the specialists is the underwriter who has been doing this awhile with a broad base of knowledge. They are the higher priced and highly skilled person who will now serve their highest and best use.
_____ How will you break out datasets and forms to go to the correct specialist without giving them the entire file? Privacy and access to information is extremely important and not all people need all information to do their job.
_____ What will the workflow look like? Will you wait until all pieces of the puzzle come in and then submit a loan? Or, will you approve the segments of the loan as they are completed?
_____ How will you alert your processor or file coordinator that a segment is ready to go so that it doesn’t sit and wait?
I have just hit the highlights here. These questions are meant to get you to brainstorm viable options for your company, as you strive to become more efficient and more profitable.