A balanced approach to managing a nonprime portfolio.

Author:Singh, Teji
 
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What does success look like today for nonprime servicers? Leading servicers balance many goals: increasing net income, enhancing the customer experience, containing costs, advancing best practices and earning a strong reputation. A focus on four measurable pillars can lead to success in achieving these goals in today's challenging and changing environment. These pillars are:

* Purposefully managing team performance;

* Containing and managing costs;

* Advocating a strong customer focus; and

* Mitigating litigation and compliance risks.

Effective performance

Everyone looks at performance, but how do we determine if we are performing effectively? Measurement is the key. Start by identifying gaps between current performance and future goals, benchmarking against industry competition. Then create a strategic roadmap using an operating plan complete with specific tactics, action items and deliverables. From this operating plan you can measure effectiveness using scorecards, automated desktop reporting and regular checkups.

Scorecards

A scorecard is a quick, at-a-glance look at key performance indicators such as net income, cost per loan and revenues over a given time period, usually monthly or quarterly. Scorecards should consider each team's specific contributions within the context of the company strategy.

At Option One Mortgage Corporation, we tie scorecards to the company's overall strategy as well as to management performance. We also tie individual and team evaluations to key performance indicators so everyone knows what their contributions are and what their stake is. The scorecard helps achieve consistency across teams and foster commitment to the strategy.

Automated desktop reporting

Managers should be in charge of managing--not just developing--reports. Giving them the tools to manage through a dedicated business intelligence team can have a profound impact on your ability to assess your business. Such a team takes ownership of creating regular, automated, desktop reports for real-time information--data that will enable you to quickly address problem areas.

Regular checkups

Scorecards and desktop reports are only beneficial if you actually use the information. That's why it's imperative to regularly check up on progress. Promoting the scorecard, measurements and reporting teams is essential to realizing the benefits of measurement. Regularly revisiting key performance indicators gives employees a clear and easy-to-understand measurement...

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