Most mortgage companies are still feeling the brunt of the mortgage implosion a couple of months back. It seems that for most players in the industry, it is a choice between "playing it safe and wait until things get better" or "close down shop and move somewhere else". The mortgage industry may still be reeling in the slowdown, but there are other options .
Here are some ways how outsourcing can help you stay ahead at these times and position yourself for a better market condition.
1. Outsourcing boosts your profits.
As with most industries, cutting costs can mean saving your business. Outsourcing some of the back office work such as processing, quality support and clerical or analysis functions can reduce your manpower costs by an average of 40 percent. If you factor in other overhead costs such as office space and utilities, the savings will simply be bigger. It doesn't mean however that you should go out and look for the cheapest outsourcing provider as they will reduce your cost the most.
Many companies get burned with outsourcing deals simply because they chose to stick with the cheapest deals instead of those that can provide the best value and service. The bottomline is to increase your return of investment and focusing single-mindedly on reducing costs will doom your outsourcing endeavors from the start.
2. Outsourcing increases your productivity.
There are those who say that outsourcing may save you some money, but will lead to a loss in productivity. This may be true in some cases as a number of companies suffer losses in the transition stage. However, as a number of outsourcing providers and clients can testify, if outsourcing is done properly it will lead to an increase in productivity. The increase is attributed to the client's mindset and approach towards outsourcing.
3. Outsourcing updates your capabilities and experience.
Having a partnership with an experienced outsourcing provider will open your business to new technologies and bits of knowledge that would otherwise be unavailable to you if you simply work on your own. The mortgage industry in general is relatively a late-bloomer when it comes to technological integration, which has been proven to boost efficiency and productivity. Other sectors especially in the financial services have been reaping the benefits of new technologies and innovations, but quite a number of small and medium sized mortgage companies are still far behind, some even perform the entire loan process manually.
In processing loans, some of the bigger lenders who do it manually, e.g. submitting loan applications and underwriting packages via transboxes and overnight. One major reason is the high cost of technology that small and medium sized mortgage companies simply cannot afford especially at this time. Setting up a secure server running your database and programs, getting connected with decent internet providers and service, and having an IT person in charge of it can easily cost you tens of thousands of dollars in set-up and maintainenance.
It is an imperative for outsourcing providers to run this kind of set-up and to be updated in all aspects of it.
4. Outsourcing expands your marketing network
It is a fact that the mortgage industry thrives on connections with people from other industries. When was the last time that you've closed a loan for a client who is someone within the mortgage industry? More often than not, as a mortgage professional, your client is a friend, referred by someone, or a stranger who works in a different field. It is a part of your daily routine to seek new prospects and expand your network. You've probably sent out emails, made some cold calls, have lunch with a friend's friend in search of a fresh lead.
One route that hasn't been explored much is the outsourcing partnerships. An outsourcing company, as a service provider, is by nature connected to a diverse field of industries.
5. Outsourcing allows you to focus on other core aspects of your business.
It is a common dilemma of most small and medium sized mortgage companies how they are going to split their time, effort and resources between marketing and processing, and not to mention the administrative work such as maintaining an office and managing your people. It is almost an accepted fact that one of the two would have to tale a hit in favor of the other. I've seen a number of mortgage companies who have grown accustomed to shifting their focus between marketing and processing depending on what the current market situation is. This strategy may work, but being able to focus on all core aspects of your business 100% of the time is a key factor in growing your business.
Outsourcing strategies will allow any mortgage company to allocate 100% focus on all aspects of their business. You can focus on your marketing drive while simply supervising the processing operations while the outsourcing provider takes care of the administrative work. Or you can simply coordinate with Infinit-O your expected processing results while you work on getting new applications. The possibilities are limitless but you can have one that suits your style and needs.