What is a mortgage pipeline? It is akin to a holding tank where loans that have been "locked in" go until the loan is placed into the loan portfolio, is sold, or falls out. According to Investopedia's definition of a mortgage pipeline, mortgages in the pipeline are "locked" and are protected against interest rate changes. However, some lenders include mortgage leads in their pipelines. In either case, the mortgage pipeline should be managed, and it should be managed as effectively as possible. Below are a few of the benefits of effective mortgage pipeline management:
- Mortgage pipeline management allows you to be proactive. By using mortgage pipeline management software or an effective management process, you can quickly view all activity in the pipeline, including lead tracking, new loan originations, loan status, and more. A centralized view allows you to know what's going on and where to focus.
- Mortgage pipeline management allows you to create an efficient workflow. Some mortgage pipeline management tools allow you to create a set of best practices to follow. For example, you could create a set of different loan scenarios to be used in consultative discussions with borrowers at a predetermined pipeline step. You could also create milestones and tasks associated with the pipeline to ensure that each loan flows in an orderly fashion and that all necessary steps take place.
- Mortgage pipeline management allows you to monitor and respond to risk. By effectively managing the mortgage pipeline, you can also react to market changes and take control of your sales and lead generation activities accordingly. For example, if rates are trending upward and you have leads that haven't committed, you may want to reach out to these leads to get them locked in before rates get much higher.
- Mortgage pipeline management allows you to identify the best sources of mortgage leads. In addition, you can track the performance of your lead sources through the mortgage pipeline management process. By identifying each mortgage's referral source, you can later compare results. Which referral sources resulted in closed loans? Which ones had the highest ROI? Which ones consistently referred the right types of loans for your business? Which ones tended to refer low value loans? Which ones tended to refer leads that were not right for your business? By identifying the winners and the losers, you will be in a much better position to determine which referrals sources to invest in in the future.
Mortgage pipeline management is a process that involves moving borrowers through the pipeline and ideally into a closed loan. By managing the pipeline effectively, lenders can take a more proactive approach, work more efficiently by following a well-thought-out workflow, monitor and respond to risk, and make better decisions regarding mortgage lead generation. Both manual and software-based mortgage pipeline management processes can deliver these benefits. Improve the quality of your loans and ensure a healthy flow of borrowers in the pipeline by improving your mortgage pipeline management process.
Frank Shields has been a mortgage and loan adviser for a number of years. He has collected sources from http://loanlogics.com/pipeline_management.html to write this article. Feel free to connect with him over at Google+ to learn more about the author.