LEAN LENDING Producing quality loans at the lowest possible personnel and technology costs.

Personnel expenses account for 2/3 of lender costs.

Lenders understand that reducing personnel costs has the greatest impact on profitability.

Source: Stratmor/Mortgage Bankers Association

Personnel 64%

Other 23%

Corporate Allocation 7%

Occupancy and Equipment

4%

Technology 2%

However, lenders have not realized cost improvement.

Personnel costs per loan have increased 52% from 2009 to 2012

Managing costs while maintaining loan quality is a complex issue that requires effective processes enabled by effective technology.

Source: Stratmor/Mortgage Bankers Association

$2,353

$3,070 $3,226

$3,570

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2009 2010 2011 2012

Personnel Cost Per Loan

KEY  OBJECTIVES  ELEMENTS  

Lean Lending is a pathway to achieving greater profitability. Lean Lending is a production practice that produces quality loans at the lowest possible personnel and technology costs.

Eliminate Waste

Reduce Personnel

Costs

Reduce Technology

Costs Reduce

Cycle Times

Improve Loan Quality

Ensure Agency

Acceptance

Ensure Investor

Acceptance

Ensure Regulatory Compliance

Drive Continuous

Improvement Measure

what matters Manage what is Measured

Increase LOS Utilization

$$ $$ $$

LendingQB is an LOS ideally suited to meet Lean Lending objectives…

CRITICAL  SUCCESS  DRIVERS  KEY  OBJECTIVES  

Eliminating waste is achieved through automation, procedural discipline and lowered technology costs.

Reduce Cycle Times

Reduce Personnel

Costs

Reduce Technology

Costs

•  Automated AUS/Pricing •  Automated Compliance

audits Automated Disclosure Generation

•  Automate Redundant Tasks •  Consolidate tasks into

“batches” and automate

•  Management Reports •  Business Rules

incorporating “Hard Stops” •  Automated Task Generation •  Automatically run accuracy

and completeness checks at the field level

Discipline Automation

•  Eliminate Hardware •  Eliminate Certain Software

Licenses •  Reduce Security and

Redundancy Costs

•  Eliminate software installation and update installation tasks

•  Reduce Configuration and maintenance tasks

Reduce IT Resources Reduce Capital Costs

Eliminate Waste

Improve Loan Quality

Drive Continuous

Improvement

KEY  OBJECTIVES   CRITICAL  SUCCESS  DRIVERS  

Improving loan quality is also driven by automation and procedural discipline.

Agency Acceptance

Investor Acceptance

Regulatory Compliance

•  Automated AUS/Pricing with all investor or lender guidelines maintained by LOS vendor

•  Automated Compliance Audits •  Automated MI Pricing •  Automated Agency Integrations

•  DU/LP •  FHA TOTAL Scorecard •  FHA Connection

•  Automated Generation of “Loan Quality Review tasks”

•  Automated Generation of Investor “Loan Quality” Packages

•  Management Reports: •  RESPA Disclosure Times •  Compliance Audit Failure

Pipeline •  Loan Officer Accuracy

Reports •  Business Rules incorporating

“Hard Stops” based on Compliance Audit Results

•  Automatically run accuracy and completeness checks at the field level

Discipline Automation

Eliminate Waste

Improve Loan Quality

Drive Continuous

Improvement

LendingQB’s Continuous Improvement Process is leveraged by lenders. LendingQB employs several processes to assist lenders with Continuous Improvement Objectives

Enterprise Process Assessment

KPI Development Sessions

Peer-Based Data Analytics

Implement Plan Review Measure

Red-Flag Report Creation & Generation

Management Report Creation & Generation

As-Is Workflow Analysis LOS Utilization Analysis

“To-Be” Workflow Modeling LOS Configuration

New Enhancement Review LOS Re-Configuration

LOS Training

Enhancement Training

LendingQB Academy

Instant Chat Support for all users

Performance Improvement Opportunity Charting

Eliminate Waste

Improve Loan Quality

Drive Continuous

Improvement

Shared Management: •  LendingQB handles

configuration and deployment

•  LendingQB provides custom development and integrations

•  LendingQB collaborates with lender on continuous improvement processes

LendingQB implements Lean Lending using a Shared Management model.

Eliminate Waste

Improve Loan Quality

Drive Continuous

Improvement

LendingQB

Lender

SHARED MANAGEMENT

The Shared Management model shifts accountability from the lender to LendingQB.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Shared Management, Hosted Software Lender Vendor

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Lender Management, Installed Software Lender Vendor

Shared Management is enabled by LendingQB’s 14 years of experience as a SaaS provider.

ADVANCED SaaS INFRASTRUCTURE

•  Our data center is hosted, owned and maintained by us

•  Over 14 years of experience as a SaaS provider

•  Multi-Tenant Platform •  SSAE 16 Certified, TruSecure certified •  RI3PA/Payment Card Industry (PCI)

compliant since 2008 •  Single relational SQL Database •  .NET framework

PROVEN PERFORMANCE & SCALABILITY

•  600+ financial institutions processing millions of transactions per month using our platforms

•  31 bank & credit union customers that exceed $2 Billion in Assets

•  Utilization thresholds (capacity, bandwidth, etc.) are monitored to not exceed 40% utilization

•  12-month uptime is 99.998%

Summary •  Lenders have not had much success lowering

personnel costs even though they represent two-thirds of overall production costs.

•  Lean Lending provides a strategy for lenders to improve profitability.

•  Lean Lending has three primary elements: Eliminate Waste, Improve Loan Quality and Continuous Improvement.

•  LendingQB is a SaaS-based LOS provider that has the core competencies to deliver Lean Lending.