The offering is being made by the company's Promontory Fulfillment Services unit
Promontory MortgagePath has launched a new online cost savings calculator through its Promontory Fulfillment Services (PFS) business in response to the number of exits by banks from their mortgage origination business, according to MortgageOrb.
The new offering allows mortgage companies, credit unions, and banks to calculate the operational cost of residential mortgage loan origination. The users can then compare the results to the cost of PFS’s outsourced product.
Promontory Fulfillment Services Head of Operations Ken Janik said the calculator uses an institution’s own figures and delivers results specific to the client.
To compute their cost of origination, lenders will need to input the number of loan units it originates per month; the number and annual salary of full time loan-production staff including processors, underwriters, closers, and administrative staff; and the number and annual salary of support staff such as those in compliance/legal, secondary marketing, and technology.
Since the offering assumes the lender will continue to prospect for the loans, it does not cover compensation for loan officers and focuses only on operational costs after the loan has come into the lender. Promontory MortgagePath also said that the calculator’s cost analysis identifies operation areas that are potentially understaffed or could lead to possible compliance risks.
“In the last few months, we have seen a number of mid-tier banks exit the mortgage origination business because they couldn’t justify the low margins or stand the cyclicality of mortgage lending,” Promontory MortgagePath CEO Bruce Witherell said. “Our new calculator lets executives do their own math, and in minutes, come to their own conclusions about their true processing costs. They can also see how they can competitively continue to offer mortgages as a product without maintaining a mortgage operation.”
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