Costly Errors

There were several issues plaguing the mortgage department of Marquette Bank back in early 2000. 

1. Manual data entry

   • Process: When a loan would pass from loan officer, loan processor, closing department, and finally post-closing department, customer’s information would be manually entered into MS Word or other software and then documents printed out for the customer to sign and ultimately, recorded with the county.
     

   • Problem: Part of what made this process prone to errors is the forms being filled in were not templates with spots to fill in customer’s information. You would need to find the name of the previous customer and find and replace with the new customer’s name. You also needed to remember all the data points that needed to be replaced. For example, close date, property identification number, customer’s name, address are just a few. You could have spelling differences where there may be “Ave.” vs “Ave” and therefore, not catch the right text to find and replace.
     

     After a loan closes, the file is moved to the post closing department, where their responsibility is to go through the loan with a fine-tooth comb and find any problems with data not matching between title, mortgage, application, recorded documents, etc.  When using the process mentioned above, there were often problems that needed to be corrected.  In some cases, a simple call to the title company would fix an issue; however, in more costly times, the documents needed to be re-recorded with the county, which could cost $25/document.
     
     

2. Surplus of files

   • Process: When a file finally closes and passes inspection by the post-closing department, the file is physically filed away in metal file cabinets, in alphabetical order. This process worked great, until it did not. As time goes on, the number of files continues to grow. Even though space was left in each cabinet for new files, there would eventually be too many files for the cabinets and files would eventually be left on top of the cabinet.
     

   • Problem: A few times a year, a few people would need to work overtime and remove all files, alphabetize, and put back into the cabinets.
     
     

3. No tracking system

   • Process: When a file would close, it would get stored as mentioned above. However, if a file was removed, that was not tracked. Or if the file was on top of the cabinet, that was not tracked.
     

   • Problem:  There were often repeat customers for the bank and a loan officer would use the customer’s previous loan to begin the new loan.  They would often come to the post closing department to retrieve the previous file.  Because there is no tracking system, there would often be files that could not be located. 
      

     More importantly, at least once a year the Federal Reserve would come to do an audit. They would provide the loans they would like to audit in advance in the post-closing department would scramble for weeks trying to find all the files needed.  This was time-consuming and unnecessary.

Design, Build, Buy-In

There were 3 main problems identified and over the time I worked at Marquette, I worked towards solving those 3 problems.

1. Manual data entry

   As one of the people manually entering the data for each loan that crossed my desk as well as the person who needed to take the trip to the county building to get documents re-recorded, I found it a priority to fix the issue.  I knew from my university studies that there was technology they were not utilizing.  In my own time, I created an MS Access database that started small with just a few tables.  I started by entering in the data as it came across my desk and then building the reports we printed out in MS Access as well.  I then built an interface of forms for others to look up a customer, select the record, fill in additional information, and print out the documents they need.  I worked with the supervisors in each department and walked them through the process, identifying how each step would help them in their day-to-day responsibilities. 
   
   
   

2. Surplus of Files

   After shifting files a few times, I knew there had to be a better way.  I came up with a numerical system to implement.  This idea took a while to get buy-in from leadership.  People are married to the alphabet.  I wrote up my idea, identified supplies we would need, including additional cabinets, and started on my prototype.  The idea was simple:  each file that came into the post-closing department, it would be assigned a number, like “10-04-25”.  This would identify the file would be in the 10th cabinet, 4th drawer, 25th file back.  This would allow the department to grow without having files living on top of cabinets and saving overtime for employees throughout the year.
   
   
   

3. No Tracking System

   In addition to the file having a number on the folder, there was an additional database created that would allow employees to look up the load and pull up the customer’s file number.  That number could then be quickly used to retrieve the file.  The file would then be tracked in the database by who checked it out and the day it was checked out.  Having this trail allowed for a quicker retrieval of files when loan officers requested a file and when the Federal Reserve came calling.

Less Errors/Less Costs

At the time of working at Marquette, they were closing between 70-100 loans a month.  I would estimate 10% of those loans had errors in the forms that required re-recording, which were now drastically decreased.  In addition to the costs of re-recording being reduced, the time and effort was also reduced, allowing employees to work on other tasks. 

In addition to savings on fixing documents, the risk of not being able to find a file and then fines occurred with the government during an audit were also reduced.  During the tracking update, I also made a checklist for the post-closing department to use in order to sign off on all files that they would be ready for audit when the time arrived.