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How mortgage lenders can manage changing interest rates

Alight takes the guesswork out of forecasting with real-time analysis

Changing interest rates can have a profound effect on your mortgage lending volume, increasing the pressure to generate accurate forecasts around your staffing needs, servicing portfolio, net income and product mix.

Predicting what comes after an interest rate change may seem like a high-stakes guessing game, but mortgage lenders using Alight’s dynamic analysis can get critical visibility into their breakeven point and know what funding levels they need to maintain profitability. These executives can also forecast general and administrative expenses and branch profitability with every change.

While no one has a crystal ball when it comes to planning, those who have the capability to perform dynamic analysis by running multiple ‘what-if’ scenarios can plan for any number of contingencies and proactively manage their business rather than reacting to changing conditions.

Without dynamic analysis, you are left to evaluate the impact of changing economic conditions using actual performance. Assuming conditions start to change in January, most companies begin their analysis in mid-to-late February after the January books have been closed.

This means you could be almost two months behind the curve when it comes to adjusting to economic changes. As the Federal Reserve shifts back into a more “normal” mode of setting interest rates, a two-month lag time could spell disaster for mortgage lenders making critical business decisions.

Alight provides you with the ability to evaluate past, present, and future performance from every angle. Lenders can evaluate growth strategies, new revenue opportunities, and cost cutting measures all within a fully integrated, enterprise management system.

Alight helps mortgage lenders analyze warehouse utilization using factors such as dwell time, capacity, investor fees, non-usage fees, and so on to determine total warehouse cost and compare the cost of each of your warehouse lines.

Instead of a passive, reactionary response to economic changes, CEOs, CFOs and branch managers can make contingency plans 30, 60 or even 90 days ahead of time and manage change to their advantage.

Having the ability to plan all aspects of the business within one application provides you with the assurance that you have been able to evaluate and plan every aspect of the business to come up with the best possible strategy for growing your bottom line.

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