Why has Guaranteed Rate's average time to close on conventional mortgages increased by 5 days over the past 60 days?

Introduction

The recent increase in Guaranteed Rate's average time to close on conventional mortgages by 5 days over the past 60 days is a critical issue that demands immediate attention. This metric directly impacts customer satisfaction, operational efficiency, and potentially the company's competitive position in the mortgage industry. I'll approach this problem systematically, focusing on identifying the root cause, validating hypotheses, and developing both short-term and long-term solutions.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be seasonal factors at play. Has there been any significant change in mortgage application volume compared to the same period last year?

Why it matters: Seasonal fluctuations could explain the increase and affect our approach. Expected answer: Application volume is within normal range. Impact on approach: If volume is normal, we'll focus on internal processes rather than external factors.

• Considering potential system changes, have there been any recent updates to our mortgage processing software or workflow in the last 90 days?

Why it matters: Software changes often have unintended consequences on processing times. Expected answer: A minor update was implemented 75 days ago. Impact on approach: If confirmed, we'll prioritize investigating the impact of this update.

• Thinking about staffing, has there been any significant change in our underwriting team's composition or size recently?

Why it matters: Changes in personnel can directly affect processing times. Expected answer: No major changes in staffing. Impact on approach: If staffing is stable, we'll focus on process efficiency rather than human resource issues.

• Considering market conditions, have there been any recent changes in regulatory requirements or investor guidelines for conventional mortgages?

Why it matters: External policy changes could necessitate additional steps in our process. Expected answer: No significant regulatory changes. Impact on approach: If confirmed, we'll focus on internal factors rather than adapting to new external requirements.