If you are planning to transition from a mortgage broker or mini correspondent to a delegated
correspondent, there are many things to consider. After determining that you have met the net worth
requirements, let’s examine the benefits and risks for delegated correspondents.

Having delegated authority puts you in the most control and with control comes the opportunity to
manage your pricing margins, processes, overlays and customer service fulfillment. A delegated
correspondent should take advantage of industry tools such as a good pricing engine and loan
origination system. These tools are necessary to manage products, guidelines and to handle centralized
secondary desk responsibilities for registering, locking and delivering loans. These tools can also help
you increase profitability.    

It’s important to diversify your investors as you will want to remain flexible and nimble. Does your
investor allow you to straddle channels, i.e., delegated for conventional products, but non-delegated for
jumbo and government products? Does the investor have support teams to help with scenarios, pricing,
guidelines, bid tape, post-closing and delivery questions? Is the investor representative knowledgeable,
accessible and responsive?  

A risk for a delegated correspondent is a loan not being purchased for a non-correctable underwriting,
closing error or not meeting lock terms, as the correspondent assumes the reps and warranties. You can
manage and offset this risk with competent and qualified staff. It is important to have a good quality-
control program and compliance oversight. If hiring and training processors, underwriters, closers and
auditors is a struggle, consider outsourcing some of these activities. It is generally a variable cost vs. a
fixed cost, and a vendor that specializes in these areas will have more expertise and controls in
place. Consider partnerships with vendors that are relationship driven and have a vested interest in your
success.

Here at Gooi Mortgage, we work best with clients who consider us a seamless extension of their team
and are seeking a business continuity plan that allows for efficiencies, consistency and growth. We are
inclusive and focused on our joint goals of exceeding client expectations. If you would like to learn more
about outsourcing and solutions for delegated correspondents, please contact us – we would by pleased
to hear from you and discuss your situation.
By Laura Rosenberger

As the cost of originating mortgages continues to increase and the market continues to shrink, lenders
who want to remain competitive need to examine how best to position their organization to serve their
customers profitably and manage risk. Outsourcing to a competent partner can lower risks and produce
a variable cost versus a fixed cost.

Reason # 1 — Organization
There are challenges within every organization, some of which may include:
     – Having a limited budget for development of personnel
     – Technology
     – Not having the bandwidth to compete with lenders offering digital delivery as well as approvals
in minutes
     – Spreading resources across multiple business lines
     – Sharing internal resources that may have an agenda counter-productive to mortgage originations

A trusted advisor and outsourcing partner can provide experience and a fresh point of view that you can
rely upon to effectively manage your business.

Reason #2 — Resources
We all know there are ebbs and flows in the mortgage business. Managing fluctuations in volume and
covering gaps in staffing are only part of the issue. Finding, recruiting, hiring, training, mentoring,
managing and retaining the appropriate staff is difficult and expensive. Current staff may lack the depth
of experience needed and you may lack the resources to get them up to speed. Is your loan officer
spending his or her time processing and managing the pipeline rather than selling? Outsourcing gives
you a safety net to cover gaps and help you manage your staffing needs while allowing you to drive
more originations to your business.

Reason #3 — Process
Originating and manufacturing a mortgage loan is a simple business, however, there are a million simple
things you need to know. Multiple systems from POS, LOS, core banking systems, investor systems and
vendor systems can create inefficient and uneven boarding for new loans. The gathering, tracking and
organization of data and documentation to efficiently compile the necessary items to deliver a loan
requires constant vigilance. Peeling off some of the responsibilities to your outsourcing partner allows
you more time to focus on quality and compliance.

Reason #4 — Guidelines
In the ever-increasing need to offer competitive pricing and product, it is necessary for mortgage
lenders to have multiple investors. Managing multiple guidelines, delivery options, overlays and
compliance regulations can create an inconsistent delivery to your investors, leaving you vulnerable to
costly mistakes — or worse — headline risk. Having an outsourcing partner that is focused only on your
business mitigates mistakes and provides oversight.

Reason # 5 — Growth
To continue growth plans, or even just to keep pace with previous years, a mortgage lender needs to be
focused on some key areas: dissatisfied borrowers, lack of time to appeal to new customers growing
market share, inability to focus on millennials and buying habits in your community, and investment in
current technologies not being used to highest potential. Utilizing the resources of your outsourcing
partner can give the relief needed to create a strategic growth plan that is sustainable and profitable.

By Laura Rosenberger