In the world of mortgage lending, success isn’t just measured by profits and rates—it's often about how effectively you leverage your most critical asset: your team. While terms like ROI (Return on Investment) and ROE (Return on Equity) are familiar benchmarks, there's a lesser-known but equally crucial metric for mortgage managers: Return on Resource (ROR).
This concept becomes particularly vital during high-demand cycles in loan origination. In this first installment of our series on Return on Resource, we’ll explore why ROR matters and how tools like IncoSure can help you maximize it—starting with your underwriting team.
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The Challenge of Finite Resources in Loan Origination
Mortgage lending is a cyclical business. During boom periods, mortgage teams are faced with an influx of loan applications—but often with a finite set of trained, experienced resources.These key resources include underwriters, processors, and loan officers who not only understand the lending process but also have the expertise to guide borrowers toward the right products.
But here’s the catch:
Cycles are short
Opportunities are fleeting
If you miss them, you miss out on significant revenue opportunities. Hiring and training new talent during a surge isn’t feasible, as everyone in the industry is competing for the same scarce resources. In fact, many lenders have resorted to offering hefty weekend bonuses to secure underwriters on short notice.
And once the cycle ends, there’s the painful reality of trimming down those same teams.
So, how do you make the most of the resources you have? This is where maximizing Return on Resource (ROR) comes in.
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Why Underwriters Are Your Most Valuable—and Scarce—Resource
During high-demand periods, underwriters often become the most constrained resource. They are so vital that many lenders make difficult choices, such as cutting back on complex loans—like those from self-employed borrowers.
This is a costly sacrifice. Self-employed borrowers tend to be loyal, profitable clients who can generate significant long-term value. But lenders often shy away from these loans due to the time-consuming nature of income calculation.
Why is this task so critical?
Incorrect income calculations are a leading cause of loan buybacks from investors.
The task requires not just attention to detail but also a significant amount of time—time that underwriters could otherwise spend on higher-value tasks.
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Eliminating the Drudgery of Income Calculation with IncoSure
With IncoSure, we’ve tackled this challenge head-on. The reality of income calculation is that it’s 90% drudgery and 10% judgment. Our goal? Eliminate the drudgery so your underwriters can focus on what really matters.
How IncoSure Transforms Income Calculation:
Clear, Consistent Reports:
Instead of underwriters piecing together spreadsheets and documents, IncoSure provides a standardized, easy-to-understand income report.
Think of it like an appraisal report—orderly, consistent, and professional.
This structured format allows underwriters to quickly assess income without getting bogged down in manual calculations.
Virtual Panel Models:
IncoSure allows lenders to configure their own credit policy decisions and alternative income scenarios.
This flexibility ensures that underwriters can adapt to different borrower profiles without sacrificing accuracy or efficiency.
By automating the repetitive aspects of income calculation, we significantly increase the Return on Underwriter Resource (ROUR?)—freeing up valuable time and capacity.
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Enhancing the Judgment Process for Underwriters
While automation handles much of the data collection and calculation, the judgment of an underwriter remains crucial. IncoSure doesn’t just eliminate the drudgery—it enhances the judgment process too.
Key Features for Better Decision-Making:
Override Functionality:
Underwriters can select from a wide range of pre-configured overrides to adjust income calculations based on borrower-specific details.
For example, if an underwriter determines that it’s more appropriate to use a borrower’s tax return income instead of distributions, they can select that override with a few clicks.
The system then automatically updates the report and provides full documentation of the decision.
Built-In Documentation:
Every override or judgment decision is recorded with a clear explanation and seamlessly integrated into the final report.
This not only ensures compliance but also eliminates the back-and-forth that often occurs between underwriting and management.
With these tools, IncoSure makes the judgment process quicker and easier—further boosting your underwriters’ efficiency and your overall ROR.
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The IncoSure Warranty: Reducing Risk and Providing Peace of Mind
One of the biggest concerns for lenders is the risk associated with income calculations. Mistakes can lead to costly loan buybacks and reputational damage.
That’s why we offer the IncoSure Warranty.
By using our warranted income reports, you gain an additional layer of safety and assurance.
No more unnecessary worry about calculation errors.
Fewer disputes and rework between underwriting and secondary market teams.
This warranty provides peace of mind for both underwriters and management, allowing everyone to focus on closing more loans with confidence.
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Conclusion: Unlocking the Full Potential of Your Team
In a fast-paced industry like mortgage lending, maximizing Return on Resource is essential to staying competitive and profitable.
By eliminating drudgery,
enhancing judgment, and
reducing risk with warranted reports,
IncoSure helps you unlock the full potential of your underwriting team—allowing you to capitalize on every opportunity the market presents.
Stay tuned for Part Two, where we’ll explore how IncoSure can maximize ROR for your processors and loan officers.