Cornerstone Mortgage Increases Productivity by More Than 100 Percent with
DataTrac and DataTrac EDM
Company
Cornerstone Mortgage, based in Little Rock, Arkansas, is a $120 million mortgage lender with retail and wholesale branches in Arkansas and Oklahoma.
Challenge
In 2004, Cornerstone Mortgage purchased and implemented a loan origination platform and quickly became unsatisfied with the technology’s features and the vendor’s unresponsive service. One year after implementation, Cornerstone still failed to recognize any improvements in its ability to service loans, reduce operating expenses or improve other business processes as it had expected before adopting the vendor’s loan origination system (LOS).
Solution
In 2005, Cornerstone Mortgage discontinued its use of that platform and switched to DataTrac®, Del Mar DataTrac’s (DMD’s) mortgage lending workflow automation tool. In 2005, Cornerstone Mortgage also implemented DataTrac EDM, DMD’s electronic document management solution.
Results
After implementing DataTrac, Cornerstone Mortgage experienced productivity gains in several areas throughout the company. Overall, the company was able to increase its productivity, as measured by funded loan per employee, by more than 100 percent. Prior to using DataTrac, Cornerstone Mortgage was funding approximately 45 loans per employee per year. Since the DataTrac implementation, they are funding more than 120 loans per employee per year.
According to Michael Powell, president of Cornerstone Mortgage, this increase in productivity has directly impacted the company’s bottom line profitability. “Although we selected our first loan origination product primarily on price, we later decided to focus on client references and market share when we realized we needed a more effective solution. We knew we made the right choice when we reduced our cost per loan by more than $500.”
Cornerstone Mortgage has saved a significant amount of time and money using DataTrac in its closing department. Prior to implementing DataTrac, it took as long as three hours to create loan documents. After implementing DataTrac, it now takes less than forty minutes.
Additionally, DataTrac enabled Cornerstone Mortgage to reduce its processing staff from 14 to seven, yielding a 50 percent reduction. And, the company was able to further reduce its overhead by eliminating one of two post-closing department positions.
Prior to implementing DataTrac, the average time to sell loans from Cornerstone Mortgage’s warehouse line was 30 days. Since implementing DataTrac, the company now settles their loans with investors in an average of 7-8 days while having the ability to track the status of loans and to proactively identify and mitigate any problems. “With DataTrac, we become aware of issues early on and correct them before we need an extension from our investors,” said Michael Powell, president of Cornerstone Mortgage. “This saves us considerable amounts of time on the back end and enables us to work much better with investors.”
Cornerstone Mortgage also has the ability to run customized post-closing reports through DataTrac. Prior to implementing DataTrac, the company was running reports on a loan-by-loan basis and had investors calling constantly with reports of missing data. DataTrac has enabled the company to bundle loans and send them to investors more quickly and efficiently without errors or missing information.
According to Powell, “Before DataTrac, our best effort was sending 2-3 loan files per day to investors. Now we can send 20-30 loans per day to investors. This is another example of how DMD helped dramatically improve our back end processes.”
Cornerstone’s implementation of DataTrac EDM allowed the company to keep many of its staff working remotely, which has helped the company remain efficient and profitable. DataTrac EDM provides Cornerstone with the digital capacity to handle almost double its original volume without having to add staff.
In 2005, the company spent $4,000 per month in postage and overnight shipping. After implementing DataTrac EDM, the costs have been reduced to less than $1,000 per month.
The cost and time savings provided by DMD’s system made it possible for Cornerstone Mortgage to open a new business line. The company now offers outsourced mortgage services to banks, allowing institutions to provide a full-service lending operation without the management, staff, and in-house costs of a mortgage department.
“I enjoy talking to my competitors about working with DMD,” said Powell. “We are way ahead of the curve with DataTrac and DataTrac EDM, and we plan to continue leveraging DMD’s solutions to keep it that way. DataTrac has given us the ability to go the extra mile for our customers. Our partnership with DMD has enabled us to grow our company and increase our profitability at the same time.” .
For a printable version, please click here.
|