Managing the sales pipeline of consumer banks is dependent on the activity that is taking place by the secondary manager and associates that handle pipeline projections. Understanding that these professionals are the foundation of pipeline security, we present an article of six tips that pipeline managers can execute to take care of their institution.

1. Using background information as a guide

Lenders working with potential borrowers must make decisions based on the data presented to them. Lenders look at the historical data pertaining to the borrower as well as the market trends associated with their loan and its purpose.

From here, lenders must project a realistic idea of what the pull-through forecast will look like and determine if working with the potential borrower is a smart decision.

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2. Finding the right matches

Mortgage originators should be aware of their borrowers and what these partnerships will mean for the financial future. Not every loan is appropriate for every borrower, so ensuring that the right credentials are in place is a critical step to take before working together.

The right mortgage and payment schedule will vary depending on the borrower’s affordability as well as the demands that the firm has set for the pipeline. Knowing how to  make smart financial decisions is the backbone of hedge funding and protecting the pipeline.

3. Hiring competent managers

To manage the sales pipeline, ensure that secondary managers are competent in handling mortgage pipeline forecasting. In many cases, pipeline fallout is the result of poor management and the inability to keep track of estimated projections regarding where the pipeline is headed. Ensure that your management team understands the tasks involved in taking care of the pipeline proactively.

4. The loan purpose and impact

The other important factor that influences the sales pipeline is the characteristics of loans that are taken up by borrowers. It’s important for managers to understand the various purposes of the loan as each reasoning may influence the pull-through rate over time. For example, depending on the purpose of the loan, changes in interest rates may affect the way that the market moves, and the pull-through rates associated with these eventual shifts.

Depending on what the loan is for, the loan stability will vary. Protection software is only half the battle of managing major institutions; you need the right experts to judge the outcomes of collaborations for loan arrangements to go over smoothly.

5. Understanding different loans

A purchase loan is more grounded than a refinance because of the differences in interest rates. The purpose of the loan will also influence the number of options available for lenders that borrowers can consider. If the borrower has fewer lender options, the loan is considerably less stable, potentially contributing to a greater degree of risk to the pipeline.

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6. Using the rate forecasting methods

As we previously mentioned, integrating the right approaches to tracking the state of the pipeline is key to preserving it. It’s important that managers and mortgage originators know how to forecast any changes that are suspected to occur in regard to the pipeline.

Managers must be competent in regression analysis as this process is most effective at identifying the impact of interest rates and pull-through rates. How these two interact will influence the risk factor of the pipeline as well as the stability of the loan and its ability to be delivered in the future.

Essentially, ensuring that managers see the critical dynamic between pull-through rates and hedge funding is the most important thing you can do to manage the sales pipeline the right way.