Prospering in the face of reduced mortgage volumes

Jan 14th, 2014 | By Daniela DeTommaso

The year 2013 wasn’t bad. The Canadian housing bubble did not burst, interest rates stayed in check and the economy seemed resilient and stable. But, we did watch mortgage volumes diminish. Some of that effect was, no doubt, induced by CMHC belt-tightening around mortgage affordability and perhaps some was just consumer belt-tightening prompted by growing personal debt levels. Whatever the cause, mortgage lenders had to do more with less. How do you maintain profitability when the revenue side of your operation is challenged? You get more efficient and contain costs.

You might wonder how a Title Insurance Blog would relate to this situation – here is the answer. In an earlier post, ‘Mortgage Lenders Need Title Insurance Too’, we outlined the unique benefits of title insurance for lenders – essentially what title insurance protects. But equally important to lenders, perhaps more so, is what title insurance enables. With such things as coverage, enforceability, priority, survey concerns, etc., lenders need to focus on processing efficiency and speed to enhance their offerings. Title Insurance enabled mortgage processing operations deliver those very elements through a combination of automation and unique process capabilities, including:

  • Capacity to handle high transaction volumes, exacting service standards and timelines
  • Title investigation and insurance commitments are reduced to hours
  • Document processing and delivery is streamlined and faster
  • Mortgage signings can occur in-branch, sometimes even in-home
  • Customer funds are available on signing – no waiting for mortgage registration
  • Lower, fixed closing cost for mortgages

All these capabilities mean better service for borrowers. They also mean faster, more efficient and less costly processing for lenders. Those are welcome benefits when shrinking volumes challenge profitability.

Do you have specific mortgage processing challenges facing you? Let’s dialogue – together, we may find solutions.

Categories: Real Estate

2 Responses to “Prospering in the face of reduced mortgage volumes”

  1. Barry Boyd says:

    Hi Daniela,
    I enjoyed the article and while I agree that the methodology recommended to maintain adequate margins in the face of a declining market is not an unreasonable one, in the mortgage lender space this must also be met with an increase in the level of due diligence and risk management – especially as mortgage fraud continues to be a huge issue in Canada. Equifax has recently reported that mortgage fraud, in 2011, was responsible for two-thirds, or $400 million, of the estimated dollar amount of financial fraud in Canada, and in 2012, that number jumped to $600 million – a 50% increase in 1 year. The data is clear that fraudsters aren’t on vacation and your due diligence and risk management in the title insurance sector is crucial to your profitability – whether you underwrite your own insurance or utilize a third party.
    The value of your “authentication tools”…priceless.

    • Daniela DeTomasso says:

      Thanks for your comment Barry:
      This is a very astute observation. Fundamental to profitability in lending is the notion that the capital is secure – due diligence and insurance support that requirement. Efficiencies will enhance returns a little on every deal, but one full loss can negate the profitability from hundreds of deals. Clearly, process efficiencies and due diligence efforts and tools need to work hand in hand. –
      Regards, Daniela

Leave a Reply

Your email address will not be published. Required fields are marked *