Technology Fosters Greater Lending Achievements

Over the past few decades we have experienced tremendous technological advancements. These days, incorporating technolgy into lending programs can deliver great success.


Lending Achievements and Technology

Fade in to a black-and-white scene of a 1960’s suburban home. Queue the upbeat, kitschy music as the scene widens to take in more of the home. Enter the announcer, “We are living in an age of technological wonder, where labor saving devices are improving our daily lives…”

Many of us saw this film in grade school. Maybe you watched it on your black-and-white TV set. If you didn’t, trust me, it was at least as cliché as it sounds. Yet we were and still are living in an age of wonder: Machines have gotten pretty darn helpful.

What started me thinking about this was a study whose results were recently released by Fannie Mae. Known as Mortgage Focus, a voluntary benchmarking study of mortgage lenders, it provides conclusive evidence that lending technologies matter in very consequential ways.

A quick review of how mortgage lenders judge themselves. When gauging performance they look at three main metrics: cost-to-originate, closed loans per full time employee (FTE) and pull through. Lenders that dial-in these measures become the long-term players. Rates go down, rates go up, experience tells us these efficient lenders remain highly competitive.

Now the results. We learn in this study that the average cost-to-originate for all lenders approaches $1,700 per loan. The most efficient whittle it down to slightly more than $350, a five-fold decrease. The same is true when looking at closed loans per FTE.

We learn that, on average, one employee can close about six loans per month. Those at the head of the class close more than 17 loans per month per FTE. In other words, their productivity per employee is almost three times higher. And guess what: they close 10 percent more of their pipelines as well.

The ability to increase lending margins is the first reason technology matters. In fact, technology is one of the key distinguishing features of the lenders that achieve. And here’s the best news: many are credit unions. It’s true: Credit unions have better access to helpful technologies. We use it better, too.

Now to the second reason technology matters. The mortgage experience becomes both easily convenient and more affordable for those who matter most: credit union members. Back when our announcer was making proclamations about wondrous technological achievement, mortgage lending was in its pre-medieval period. You want a mortgage? Well, perhaps, but you’ll first endure six weeks of torment. Then, and only then, some underwriter somewhere might deem you worthy to repay your 20 percent down mortgage over a period of thirty years. Borrowers weren’t so much happy as relieved at the news.

Today, technology helps move members into their new homes faster. No mortgage done well should take more than 30 days, an approval no more than 15 minutes. Don’t have 20 percent down, no problem, we’ll give you several options right now. Need to close next week? Yes, we can do that, too. Dealing with the many variables that make so many options and abbreviated time frames possible is what machines were designed for.

A third reason technology matters is that it thrives on rejection. As an industry we don’t sell very well, nor do we excel at cross selling. It’s both cultural and human nature: we don’t want our members to reject us.

Think about it. On the other hand, how often do you tell your computer you love it? Probably not often. Yet it doesn’t fret, it does its job. The ability to remain undaunted by constant rejection makes computers the ideal sales consultant. Technology doesn’t care: no matter the number of negative responses, it continues to ask the question. So, when we approve a first mortgage, why not have your system approve a home equity line-of-credit at the same time?

Fade in to a computer generated image of a 21st century home. Queue the synthesized techno-music as the scene widens to entire neighborhoods of happy homeowners. Enter the announcer, “We are living in an age of technological miracles. Miracles that improve our daily lives…” This time, though, it’s our grandchildren who are watching the scene unfold on their super-saturated color bio-plasma screens. Yes indeed, we live in an age of wonder.



This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

If you are interested in contributing an article on, please contact our Callahan Media team at or 1-800-446-7453.


Sept. 27, 2004


  • One good area to begin using technology is with residential valuations. (AVMs) These days you can have the value of a home in 9 seconds. No appraisal needed for over 65% of loans.
  • Interesting, this makes our Credit Union have to look more closely at on line approval system not just for the service but also for the cost benefit.
  • More info on the credit unions versus the "Other" lenders is of great help.