Key facts
- Technology alone cannot differentiate lenders on cost because it is readily available, according to the author.
- The author defines company culture as the level of transparency and accountability a system can tolerate.
- The author's company reduced its non-sales cost per funded loan from approximately $5,800 three years ago to $2,971.
- The author's company eliminated its post-closing department, reducing dwell time from 17 to 10 days.
- The author's company prices about $1,250 a loan below the benchmark.
Richard A. Weidel III, CEO of Princeton Mortgage, argues that a company's culture, defined by transparency and accountability, is the primary driver of cost efficiency in the mortgage industry, rather than technology alone. In a recent HousingWire Mortgage Banking Conference, Weidel reiterated his 2024 message that lenders must reduce their cost per funded loan. He noted that while technology is accessible to all, the willingness to implement transparent systems and hold individuals accountable for their productivity is what truly differentiates lenders.
Weidel shared that his company has significantly lowered its operational costs by focusing on internal processes and tying compensation to loan production metrics. This approach has resulted in a lower cost per funded loan compared to the industry average, even while increasing originator pay and offering more competitive pricing. He contrasted this with the common industry practice of cutting headcount or canceling contracts without addressing underlying systemic inefficiencies.
The author explained that by making costs visible to each employee and linking compensation to productivity, his company achieved a substantial reduction in non-sales costs per funded loan. This transparency, he believes, prevents the prolonged losses seen across the industry when teams lack awareness of the true economics. Weidel concluded that the ability to run a company efficiently, rather than just its technological capabilities, will determine future success in the mortgage sector.