1. Mortgage Company. They have a nationally recognized 6-month training program where you will rotate through 4...

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1. Mortgage Company. They have a nationally recognized 6-month training program where you will rotate through 4 departments (processing, underwriting, closing, post-closing) to learn all the major areas of the mortgage business. At the end of the training period, you will be placed in your permanent position within the company. You are hoping to be an underwriter because you will make serious bank in that role. You know it is the most competitive starting position and only one spot is made available each year for a new hire. To land this role you need to be ready to go above and beyond during your training to demonstrate that you deserve the coveted spot in the underwriting department.

During your first day of training, you learn some basics about the Mortgage industry:

Mortgages are a type of loan that's used to finance property - frequently homes.
Moohib is in the business of making mortgages to those interested in buying property (clients).
There is a great deal of paperwork necessary to ensure the clients are credit worthy, the property is worth the loan price, and Moohib will be able to sell the loan in a secondary market.
The basic client process to buy a home:
- find a home ➔ have an offer accepted by the home seller ➔ apply for a mortgage with Moohib by providing personal financial information and details about the property ➔ agree on a closing date (the day the loan will be signed and the client becomes a new home owner) ➔ close on the home
The basic Moohib process to provide a mortgage to a client:
- receive a preliminary loan application from a client ➔ organize information about client financial standing and details about the property (processing department) ➔ do an extensive evaluation of the client’s credit history, assets, the size of the loan request, and how likely the client is to pay back the loan (underwriting department) ➔ communicate with all parties, collect additional information, answer questions, ensure the timeline, set the date to close the loan (closing department) ➔ reconfigure and refine the mortgage after closing to prepare it to be sold in a secondary mortgage market (post-closing department).
Because there is extensive risk in the mortgage industry it is paramount that all paperwork and information is perfectly correct and complete before the day of closing.

During your first rotation in the processing area, you notice that many of the files are not ready and complete by their goal date. It is unclear what the reason for the problem is, but one thing is for sure, any time a mortgage closing date must be rescheduled or the paperwork (files) has to be expedited, management is unhappy. You realize that even though you are brand new, if you could help find a solution to this problem the highly coveted underwriting position would be as good as yours.

Although you can’t count on getting much help since technically this is an unassigned side project, you are determined to jump right in and use everything you learned in BSAD 343 to solve the problem and make a positive contribution to the company. You decide to get out your old class notes and review the 3 stages and 6 steps of data analytics.

I Framing the Problem – Involves defining the question the analytics will answer and the decision to be made on the basis of that result.

1.) Problem recognition

2.) Review of previous findings

II Solving the problem – The stage when you decide what variables are going to be in your model, collect data that measures those variables, and then actually do the data analysis.

3.) Modeling (& variable selection)

4.) Data Collection

5.) Data Analysis

III Communicating and acting on results.

6.) Presenting the outcomes to ensure understanding by the decision makers.

Step 1 - Problem Recognition.

Given the importance of this opportunity, you decide to be bold & ask the more seasoned employees their thoughts about what is going on. You also pay close attention anytime you hear someone talking about “late closings,” “incomplete files,” “missing documents,” “closing protocols,” “underwriting issues,” “matching information,” or “files kicked back”. You aren’t even positive that these are the most important issues and terms, but it’s a start. At the end of your first week, you look at your notes & this is what you have so far:

Moohib has been in business for over 53 years.
The mortgage business is a very competitive business.
Moohib’s success has traditionally depended on return business and word of mouth recommendations.
Moohib serves an array of clients: first time home buyers, investors, vacation homes buyers, returning customers, etc.
Clients consistently report that a smooth, quick closing is of paramount importance to them.
Roughly 32% of closings have to be rushed or rescheduled.
Rushing a closing costs more money for Moohib
Getting a mortgage is a very stressful experience for many home buyers.
Rushing a closing usually necessitates paying unplanned overtime in the closing department. Rescheduling a closing costs even more than expediting (rushing) a closing.
Rushed closings result in more errors which inconveniences the client and can create more problems & expense to the post-closing process.
Rumor has it that a closer was fired last month because so many of his files had missing or incorrect information.
Last quarter a number of negative Yelp reviews brought the company’s rating down from a 4.7 to a 4.5 - which makes them now equal to their biggest competitor.
Nobody seems to be directly addressing the issue even though there seems to be a lot of closed-door discussions by management.

You take the weekend to attempt to clarify two things in your own mind: what the problem is and why it matters.

A.) Given what you know at this point, what is most likely the problem?

___________________________________________________________________________________________________________________________________________________________________________________________________________

B. )Given what you know at this point, why does it matter?

As you start another week of training you want to have a plan in place to make sure you are accurate in your understanding of some of the information you have come across. You know you will have a one-on-one with your new training supervisor, Madeline, on Monday afternoon.

C) When you have a chance to ask your supervisor Madeline questions, what would be the best tool to use if you want to better understand what the root cause of why expedited files are more expensive to process than regular files? _________________________________________________

In your Monday meeting you begin sharing some of your thoughts, questions, and concerns with your supervisor Madeline. You quickly realize that she is very interested in the success of the company and is impressed by your initiative. She offers to meet with you for extra time during your Monday training meetings each week to help you in any way she can. She suggests that you take the information you have so far and come up with a few ideas of what the most likely cause(s) of the problem are.

d) What would be the best tool to use to explore numerous possible causes of files being rescheduled? ______________________________________

Based on everything known at this point, you decide to list all the possible stakeholders, but then you hesitate. You ask yourself, “self, is it ok to think about the stakeholders this early in the process?”

E) Is Step 1 the right time to start thinking about stakeholders – why or why not?