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The First Mile - Single Family Loan Document Processing in 37 Minutes


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Charles Weidman, President & CEO of Buddha Logic discusses their recent ECM implementation with Brian Mueller, CHFA Manager - Integrated Records Management.

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The First Mile - Single Family Loan Document Processing in 37 Minutes

  1. 1. The First Mile – Single Family Loan Document Processing in 37 Minutes
  2. 2. Presented By: Charles Weidman President & CEO Buddha Logic Brian Mueller Manager, Integrated Records Management (IRM) Colorado Housing and Finance Authority
  3. 3. The Challenge “The Black Box”  Starting several years ago, CHFA converted to image loan files and secure electronic delivery  Implementing technology dropped processing time from several days to just eight hours  Loan document processing consists of:  350 – 500 page single family loan application  Classifying each document correctly  Assigning applicable keywords  Storing the entirety in CHFA’s image system  Loans are then available for review  This is referred to as the “first mile” of loan delivery and validation process  Increased improvements reduced processing times by four hours  Lender frustrations became apparent  No visibility into the status of their submitted documents made the experience seem to be like sending documents into a “black box”
  4. 4. CHFA’s Solution  IRM and IT partner to create a document delivery portal • Allows lenders to upload their documents and receive immediate status verification as to the receipt and validity of loan documents  Supplemental inclusion of a software tool call Kofax Transformation Modules (KTM) • Identifies loan documents automatically • Increased processing speed at classification • Tools still requires human review to ensure accuracy of document classification and separation • A critical function of IRM • Working with Kofax we achieved new understanding of processing time to validate the systems classification and separation
  5. 5. CHFA’s Solution  What ‘s behind the scenes  Foundation • IRM’s work to build and document CHFA’s document taxonomy • IRM’s work to review and document Processes and SOPs • IRM’s continuous improvement approach  Education • Internal: Intensive staff involvement in understanding and learning content • Walk a Mile training with business unit to gain expertise • External: Engagement early on with our partners to standardize naming conventions and ease of use in delivery process
  6. 6. CHFA’s Solution  We identified lag time of more than 15 minutes between the document review and validation touchpoints • Established a Key Performance Indicator target of getting document batches from review to validation in three minutes and five seconds or less, on average • CHFA has seen a marked improvement in loan file processing  Using analytics to create insight has created a culture shift in IRM • We can pull data on our process and see how long each step takes • Discover where delays occur • Increased awareness of performance • Motivate the entire team to step up their game • Deliver better service and to do it faster and more accurately
  7. 7. Achieved Measurable Improvement  Some measurable improvements include: • Achieved a 63-minute single family loan file processing time in 2015 • Improved to an average 37-minute single family loan file processing time in 2016 • Handled 42 percent increase in loan file volume without increased headcount in 2015 • Achieved a Ginnie Mae document accuracy rate of 99.87 percent (error rate of only 0.13 percent). Previously, error rate was 5 percent annually • Won “First Mile Solution of the Year” Award from Lexmark (Kofax) in 2016, beating out international and Fortune 500 Company competition
  8. 8. Achieved Measurable Improvement  What ‘s behind the scenes • A KTM Model that implements chfa’s document taxonomy • A commitment to provide monthly care and feeding of the Model • Removing out dated content • Identifying and training new content • IRM’s is self-monitoring, they look for process improvements • Standard File Naming Conventions • Straight-Through Documents
  9. 9. Effective Use of Resources  The goal of an nonprofit is to do more with less, and CHFA is no different • The “First Mile” improvements have allowed the IRM team to handle a 42 percent increase in loan file volume without increased head count • Since IRM is now responsible for document classification, CHFA’s Home Finance team is able to evaluate more loans in less time • Faster decisions to either approve or suspend the loan
  10. 10. Benefits vs. Costs  CHFA’s greatest benefit has been the ability to increase loan production by almost 50 percent without adding headcount • Additional cost savings include lender savings from shipping, reduced physical records storage and destruction costs, and paper costs • This equates to a combined annual savings of approximately $1 million
  11. 11. Replicable  HFAs are document-intensive organizations • To achieve operational efficiency, transitioning to imaged documents is a must • To achieve the next level of speed and agility, an HFA would need to consider investing in a document classification engine • There is upfront and on-going cost to this technology, it has resulted in overall savings • It is key to incredible operational efficiency gains
  12. 12. Maintainable  ECM is not a ‘Project’, it is a Program • Budget • chfa provides an annual budget to maintain and grow their ECM program • Support • IRM is the champion of their ECM program providing: • Education and Training for internal and external customers • Documentation on how to process, access and store content • Innovation through their Continuous Improvement approach • Partnering • chfa approaches working with Vendors as partners
  13. 13. Achieve Strategic Objectives  Rapid processing of single family loan files is evidence of advancing continuous improvement • That is a key philosophy that CHFA has embraced to improve our operations • CHFA believes that more efficient, effective operations lead to increased profitability, which allows us the ability to have a greater community impact in the communities we serve
  14. 14. “You can’t manage what you don’t measure”  Analytics review
  15. 15. Questions?  Buddha Logic, Inc. • 4845 Pearl East Circle, Suite 101 • Boulder, Colorado 80301 • 720.739.1773 • •  CHFA • 7595 Technology Way, Suite 300 • Denver, CO 80237 • 303.297.2432 • •