SCA Rate Lock Desk Services
By Bill Dolan, CMB
If your financial institution is looking to add new investors and meet their requirements, strengthen your operational efficiencies and increase pipeline volume and profitability, a centralized rate lock desk is not only a necessity but is mandatory for mortgage lenders today.
Why You Need a Centralized Rate Lock Desk
It allows your loan originators to do what they do best – originate. If your MLO’s are locking loans, they are NOT developing leads, building new referral sources nor working with their clients. Their performance has a clear correlation to your mortgage volume.
To establish your company controls – The rate lock desk is an essential part of compliance risk management policy and performance reporting.
To enhance your regulatory compliance capabilities – By centralizing your rate lock desk, you can create a rate lock activity log, a history of pricing or price changes and exception approval documentation required for your audits.
It ensures pricing accuracy and verifies available target pricing and technology accuracy.
It guarantees the monitoring of lock expirations and investor retargets but most importantly, it ensures your MLO’s are extending or cancelling locks in a timely manner.
What SCA Provides by Outsourcing this Secondary Market Function
If you are or may be becoming an Optimal Blue User, SCA’s rate lock team’s primary responsibility will be to lock interest rates in a lender’s pipeline, in order to increase productivity, improve data integrity and grow your loan pipeline volume, performing the following tasks on a day-to-day basis:
Determine where a loan will be locked with a “Best Efforts” investor in conformance with the company’s Secondary market policy.
Complete best execution by choosing the investor with the highest price for the selected interest rate, lock period and program to lock the loan.
Process changes to existing rate locks if a loan’s parameters change (that has been already locked) so your corresponding changes can be made with the investor to ensure accurate pricing.
Requesting extensions if a loan will not close by the expiration date of the lock and calculating the extension cost based on the number of days requested.
Processing cancellations with the investor and within the LOS system as soon as possible.
Processing relocks allows SCA to manage “worse case” pricing and/or additional fees such as when a lock is re-requested on a file that had expired or cancelled within the investors specified time frame (typically 30-60 days).
Making exceptions entails concessions and renegotiations where SCA will review on a case-by-case basis, any event that requires an exception to improve pricing or rate that are subject to a lender’s exception approval policy. Typically, management approval is required to grant any type of price or rate improvement.
Maintaining data integrity by ensuring that all required fields to submit a rate lock change or extension is complete, prior to granting confirmation.
Monitoring pull-through ensures best investor pricing.
Manage locked pipeline to ensure that all changes are being repriced and when necessary, price changes are updated to ensure the institution’s profitability is maintained.
SCA’s Requirements for Maintaining a Centralized Lock Desk
A Loan Origination System (LOS) utilizing Optimal Blue’s Product & Pricing Engine.
Reporting Metrics – Loan parameters, pricing, margins, MLO production, etc.
Communication channels such as designated phone, email address for the lock desk and if remote, possible video conferencing capabilities (Zoom, MS Teams, etc.).
Client’s lock desk policies and procedures are required to govern common practices such as exception approvals.
Training for MLO’s as well as step-by-step written instructions.
Hiring SCA to Centralize Your Rate Lock Desk
Using SCA to centralize your lock desk provides you the benefit of seasoned secondary market specialists that can guide you through the entire process with confidence. SCA’s rate lock desk subject matter experts responsible for locking loans have some of the greatest technology proficiency and industry knowledge out there. They have the unique perspective of utilizing multiple LOS and PPE software tools used by numerous companies to maximize efficiency of mortgage rate locks. This makes them specially equipped to assist in operational efficiencies.
Another benefit to outsourcing is access to several designated analysts on your account for approximately the same cost of one-in-house rate lock employee. This eliminates issues surrounding breaks, illness or vacations where there is always coverage to secure optimal pricing. One other benefit SCA running your lock desk is the ability for you to scale your company’s volume while eliminating issues surrounding recruiting, hiring and training lock specialty staff. Outsourcing this service can vary greatly and SCA can customize to the service level you require based on your specific needs.
With SCA, our specialists will advise you on industry “best practices” while meeting your needs for locking loans and expanding your pipeline. Centralizing your lock desk with SCA is just the first step in an evolution to higher volumes and profits.
Prior to centralizing your rate lock desk, you want to ensure you have both your LOS and PPE platforms implemented and configured properly. This may be the appropriate time to have SCA perform a Mortgage Manufacturing Assessment (MMA) to optimize your systems capabilities and to ensure you are up-to-date with improvements made to your LOS and PPE. This will provide quicker turnaround times and efficiencies, resulting in cleaner pipelines while eliminating undo risk or exposure.
Our secondary market and technology consultants allow our clients to better understand how their software works and how best to operate within it. Remaining open-minded by adapting new technology solutions is a great strategy in staying ahead of your competition.
To learn more or request a free consultation from SCA, please contact Bill Dolan, CMB at (617) 694-2617.