MortgageRight and Advantage Systems: Real World Applications for Real-Time Data, A Branch Manager’s Perspective

When it comes to the loan application process, lenders have been riding the real-time data wave for quite a while. With the ability to quickly verify borrower income and employment, paired with up-to-the-minute updates on appraisal, flood and title services, time-to-close is a fraction of what it used to be.

The challenge for many lenders today is actually one of “data overload” as they work to convert “available” data into “actionable” data. Some are finding success, however, and modern lenders like MortgageRight are effectively leveraging real-time data within their day-to-day operations to gain loan-level detail across their entire branch network, supporting loan production as well as recruiting and branch network expansion initiatives.

MBA NewsLink interviewed MortgageRight Director of Strategic Growth and Branch Manager Mike Russo and Advantage Systems Vice President Joe Ludlow.

MBA NewsLink: What are some of a branch manager’s main responsibilities in today’s market?

Mike Russo

Mike Russo, MortgageRight: As the market has shifted over the last year, I’ve been mainly focused on all our recruiting efforts, so in addition to running my branch, I’m focused on recruiting new branch managers and branch teams and evaluating that they’ll be a good fit. I then work closely with new branches that come online and help them learn the MortgageRight way of doing things.

As a company, we take a very entrepreneurial approach to our branch network and our branch managers in that all of our branches truly are free to operate on their own. They get underwriting and compliance support at the corporate level, of course, but at the branch level, we really are empowered to hire who we want, and advertise and market how we want. We run on our own P&L and it’s like running your own little mortgage company, but with the potential to earn more money.

In order for this model to work, our branch managers have to understand how to work within a true P&L model. Especially with what we’ve had going on in the market the last few years, the bottom line is a very important piece, and it’s easy to lose money in the business if you aren’t focused on the right things. One of the main problems that a lot of other mortgage companies have – and a lot of branch managers that I have talked to as I recruit them – is that they really don’t know exactly where all of their money is – including revenues and expenses – at any given point in time. Unfortunately, a lot of companies struggle to provide real-time P&L data to their branches to help them gain a clear picture of where they stand.

MBA NewsLink: How important is real-time P&L data to the bottom line?

Joe Ludlow

Joe Ludlow, Advantage Systems: It’s actually more complicated than some may think as there is money coming in from different parts of the loan, rather than a single fee – and it can be very different from loan to loan. Much like Mike, when you’re a branch manager running a business and undertaking pretty heavy marketing expenses with people on payroll, a branch manager needs to know exactly what money is coming in and going out. It is imperative that Mike can get down to the detail and very granular into everything, with precision down to the penny, breaking down on the revenue per loan and every single expense.

We see some companies still relying on emailing essentially an Excel spreadsheet, which gives branch managers some idea of where they stand from a P&L standpoint, but often the data is as much as 45 days old. So, MortgageRight being able to provide its branch managers with access to a system that can track their P&L in real-time has been a differentiator for them in terms of recruiting and growing their branch network.

MBA NewsLink: What should branch managers be focusing on the most in the current market and headed into 2024?

Mike Russo, MortgageRight: Speaking for myself and our branch managers, we are laser focused on margins. The real value of actionable P&L data comes with understanding where you need to be setting your margins, and that in turn informs how you and your team are setting and structuring your loans. That’s how this business works. We set up certain profit ratios and then the majority of business we close is based on those numbers. The reality is that there are a lot of branches that do a lot of business, but because they don’t set those things appropriately, they still end up losing money. What’s notable is that if you’re operating from good, up-to-date P&L data to begin with, the changes often aren’t that substantial, so even if you raise your margins, that rarely impacts your ability to do business or causes you to lose deals in the long run.

Joe Ludlow, Advantage Systems: Building off Mike’s thoughts – recruiting new branches is crucial to strategic growth, and transparency is key to attracting potential branch managers. Technology can play a significant role in showcasing a branch manager’s commitment to openness, but it must include tools that deconstruct real-time financial data, increase potential profitability of joining the network, and provide insights and clarity into their financial performance, while instilling confidence in the P&L model.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)