in Blog by Lindsey Neal

Digital Isn’t Just for Origination

Tales from the Back Office: Digital Mortgages Transformed the Customer Experience! Now It’s Time to Disrupt the Rest of the Process!

In case you missed it, this was the headline from September cover story in National Mortgage News, and it is spot on.

Most of the mortgage industry equates “digital mortgage” with “eMortgage,” and as such, the focus has been on digitizing borrower-facing aspects of the mortgage process, like the application, document signing and closing. The article points out that back-office processes, like underwriting, would benefit tremendously from an injection of automation but that the complexity of the process is largely what has prevented this.

While this is certainly true, underwriting isn’t the only back-office process that could benefit from going digital. Take compensation, for example. It, too, is a highly complex process that is currently suffering from a lack of automation. As is so often the case when there is data to manage, lenders have turned to spreadsheets to track and calculate commissions and bonuses for their loan originators and other production-line staff.

But make no mistake – even using an electronic spreadsheet to manage compensation still requires a tremendous amount of manual effort. That’s because payroll teams rely on pipeline data from the LOS to make their calculations each pay period. Because there simply isn’t a way to link the spreadsheet calculations to the LOS data, payroll teams must manually reconcile this data against each employee’s compensation plan to determine the commission and/or bonus each employee is due.

As a result, we often see two compensation scenarios at play:

1) To eliminate as much complexity as possible from the payroll process, lenders will limit their compensation to a handful of pre-approved plans.


2) To stay competitive, lenders allow each branch to determine how it will compensate LOs and other commission/bonus-based employees.

Each of these scenarios poses issues for lenders. By going with a pared-down list of compensation plans, lenders run the risk of not staying competitive in attracting and retaining top LO talent, which can impact their ability to gain market share. On the flip side, managing a plethora of compensation plans manually places a tremendous, on-going burden on payroll teams that often results, despite all efforts to the contrary, in costly errors that can erode LOs’ trust.

Neither outcome is desirable. With automation, both can be avoided.

Using an automated compensation platform like CompenSafe, lenders can create a direct link to their LOS and extract real-time pipeline data to calculate commissions and bonuses automatically according to each employee’s individual compensation plan. This allows lenders to be as creative and flexible as they’d like (and as the CFPB permits), in developing competitive compensation plans. In addition, the chance of compensation errors is greatly reduced because the system calculates commissions and bonuses using direct-from-the-source data, thus minimizing the potential for human error.

What’s more, CompenSafe allows employees to access their compensation information in real time, allowing them to see where they are trending from a compensation standpoint. Providing this kind of transparency goes a long way in building trust with LOs and gives lenders yet another tool in their arsenal to keep their sales force satisfied.

It’s easy to get caught up in the excitement and promise that comes with eClosings, eNotes and the rest of the eMortgage shebang, but digital can’t be a strategy just for the front-end of the mortgage transaction. Back-office processes, like compensation, also play an integral role in a lender’s day-to-day operations and are equally as deserving of a technological makeover. If you’re already in for a penny, why not go in for the full pound?

P.S. Did you know LBA Ware is a demo presenter at the Digital Mortgage Conference? Find out more here.

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