Case Study
Mortgage Bank Within $600B U.S. Financial Institution Reorganizes and Streamlines Servicing Operations, Achieving New Profit Target and Reducing Loan Servicing Costs 19%
125%
New Profit Target Attainment
Strategic Imperative
To deliver short-term profit contributions with a 450% ROI by redesigning and streamlining both management and business processes, while equipping the organization to manage the anticipated doubling of its mortgage portfolio over the next two years
Client Background
- Mortgage banking subsidiary of one of the largest diversified U.S. financial institutions, operating a coast-to-coast retail branch network
- Engagement centered on mortgage servicing operations preparing to absorb the anticipated doubling of the loan portfolio
- Servicing performance depended on forecasting, capacity planning, process efficiency, front-line supervision, accurate standards, and customer responsiveness
- Portfolio growth expectations required scalable capacity while preserving service levels and strong customer satisfaction
- Leadership needed short-term profit contributions and lower servicing costs to support profitable growth
- Three centers had recently consolidated into two with a 15% staff reduction, yet per-loan servicing costs lagged industry leaders
Key Issues & Barriers
- Top-management goals were not aligned with front-line associates, weakening ownership of cost, service, and growth priorities
- Forecasting and capacity planning were inadequate for the anticipated portfolio expansion and recently reduced staffing model
- Performance varied significantly among individuals and departments, limiting consistent servicing productivity and customer experience
- Front-line supervision was poorly defined and ineffective, constraining coaching, accountability, and timely corrective action
- Inaccurate standards, insufficient metrics, and performance-neutral rewards weakened visibility, accountability, and consistent execution
- Cumbersome core processes created non-value-added work and limited servicing productivity across departments
Key Implementation Components
- Conducted goal alignment with 12 executives and communicated agreed priorities throughout the mortgage servicing organization
- Established new organizational structures in critical departments to strengthen accountability and prepare operations for portfolio growth
- Redesigned core mortgage-servicing processes to eliminate non-value-added work and improve productivity across departments
- Implemented a comprehensive System for Managing with accurate standards, metrics, performance reviews, and corrective-action follow-through
- Developed and implemented expert models and competency management systems to strengthen front-line supervisory capability and role performance
- Created a process improvement team to sustain operating discipline and continuously improve cost, service, and capacity performance
Benefits & Results
125%
New Profit Target Attainment
19%
Loan Servicing Cost Reduction
7%
Customer Satisfaction Improvement