Commonwealth Bank & Trust Uses Loan Prospector to Increase Profitability and Efficiency
[March 15, 2006]

Are you using Loan Prospector® to its full potential?

Loan Prospector, Freddie Mac's automated underwriting service, not only offers you a comprehensive set of features and mortgage products for assessment, but also has opportunities to help you increase your profitability, reduce your processing time and empower your employees. Commonwealth Bank & Trust in Louisville, Kentucky, is an example of one company capitalizing on these opportunities.

Loan Prospector case study: Commonwealth Bank & Trust

Lead by Tom Hughes, president of the Commonwealth Bank & Trust Mortgage Division, the company has leveraged Loan Prospector's benefits and Freddie Mac's wealth of training resources, to revolutionize their mortgage application process. Tom, a champion of Loan Prospector, and one of the first to use Loan Prospector in Kentucky, turned to Loan Prospector to help him achieve his business goals. Tom's focus was on moving from a more time-consuming, traditional process to a more efficient, technology-based approach.

Just a year ago, Commonwealth had a traditional loan originating process, with the loan officer originating the loan, the processors entering the data in the automated underwriting system and the underwriters reviewing the data for accuracy.

"Using Loan Prospector and giving your employees the knowledge to use it effectively, ultimately uplifts your business and profits," said Tom Hughes, president of Commonwealth Bank & Trust Mortgage Division.

"I knew where I wanted to go with my business and I knew how I wanted to incorporate Loan Prospector," said Tom. His first goals were to save loan processing time and increase overall productivity. To meet these goals, he focused his efforts on Loan Prospector implementation and making his employees Loan Prospector subject matter experts.

The certification program

Tom Hughes, president of the Commonwealth Bank & Trust Mortgage Division (second from right), and his Loan Prospector knowledge experts and graduates of the Freddie Mac's Certification Program.

To further enhance his employees' knowledge of Loan Prospector, Tom relied on Freddie Mac's Certification Program. The program includes a Loan Prospector Specialty, which focuses on developing participants' Loan Prospector expertise. In order to become certified, Commonwealth's participants had to:

Pass an online Loan Prospector certification exam.
Submit three loans to Loan Prospector for assessment.
Conduct a minimum of two hours of Loan Prospector training, demonstrating knowledge and skills for the Training Specialist role.
Maintain status as a Certified Loan Prospector Specialist by participating in free, periodic briefings and web conferences, and annually passing an online exam.

In just over a month, six of the bank's 23 employees successfully attained their certification: one as a Loan Prospector Training Specialist and five as Loan Prospector Specialists. Commonwealth started seeing results of the certification program right away. Their loan processing time was cut in half and the need to re-underwrite loans was eliminated.

Commonwealth's process that made the difference – "One and Done"

Certification Program graduates' skills, together with Commonwealth's "One and Done" business process, immediately changed the bank's typical closing time and increased productivity. Their "One and Done" process eliminated a number of steps in the loan process and simplified the overall workflow.

"The 'One and Done' concept eliminates unnecessary steps by empowering the processors with the skills to get the job done," said Jim Martin, operations manager for Commonwealth.

The loan originates at the point-of-sale with the loan officer submitting it to Loan Prospector. From there, the loan goes directly to the processors to check the integrity of the required documentation and to ensure that the data is accurate and complete. If necessary, because of their Loan Prospector expertise, the processor is able to edit the loan before final submission to Loan Prospector, eliminating the need for further review or follow-up with the loan officer or underwriter.

"In the past the loan applications have changed several different hands, and now the flow is easier and the processors feel more comfortable validating their loans," said Denise Armstrong, processor for Commonwealth.

"One person works on the loan from beginning to end, and there is a successful comfort level established between the loan officers and the processors," said Shannon Spangler, processing supervisor/underwriter.

The "One and Done" process and Commonwealth's efforts have paid off. With this new approach in place, they've reduced their loan closing time by over five days.

Using Loan Prospector to empower employees

The impact of the "One and Done" process and Freddie Mac's Certification Program is not only notable in Commonwealth's overall profitability and efficiency, but also in the role it plays in helping Tom empower his employees. With the superior knowledge of Loan Prospector gained from the certification program, Tom feels his certified employees have enhanced their skill sets to become data accuracy professionals.

"The employees know they have the knowledge, and they use it in their daily work," said Tom. "The staff loves the 'One and Done' process and it shows in their ability to get the job done."

The "One and Done" concept is two-fold; the bank also uses it as a loan officer recruiting tool. "I think the single best way to recruit highly qualified loan officers is our ability to get the loan in and out in record time," said Larry Stewart, sales manager for Commonwealth, "and that happens because of our 'One and Done' process."

Taking it to the next level

Tom and his staff at Commonwealth transformed the way they did business by looking at their business processes, and Loan Prospector capabilities, in a new light. By discovering new ways to use Loan Prospector, they've taken Commonwealth to the next level. With improved loan productivity, increased profits and engaged employees, they've positioned themselves to expand on future endeavors within the community.

"As business partners, I met with Commonwealth to discuss their challenges and business objectives," said Michael Trippett, Community Lending account manager for Freddie Mac. "We both agreed having processors and underwriters, who are Loan Prospector experts, would increase their processing turn around time without compromising the quality of their work. The result is they are the only completely certified lender shop among their Freddie Mac Seller/Servicer peers."