How Service First Mortgage cut three days from its cycle time and made same-day underwriting routine

TL;DR: Service First Mortgage, a Dallas-Fort Worth independent mortgage banker, reduced its average time from application to clear to close from roughly 22 days to 19 after moving income validation to the start of the file with Ocrolus. As much as 40% of its files now receive a same-day underwrite, and qualifying files get a guaranteed same-day initial credit decision against a prior 24 to 48 hour standard. Service First made the tool a requirement, backed by income calculations that trace to source documents and rep and warranty coverage on those calculations.

“We used to consider anything less than 21 days a rush,” said Dee Hoyle, Executive Director of Operations at Service First Mortgage. Today the lender averages 19 days from application to clear to close, down from roughly 22. As much as 40% of its files now get a same-day underwrite, something the company had never done before. Behind the shorter mortgage cycle time is a change in when income gets validated: income questions now surface at application instead of after the file reaches underwriting. Here’s how a lender approaching 30 years in business made that shift.

Why income questions surfaced too late

Service First is an independent mortgage banker licensed in 13 states, with about 85% of its volume in Texas. Late last year, it launched an internal initiative to rethink how work moves through the company. “We had an initiative late last year that we called our Reimagine process,” Hoyle said.

Post-pandemic margin compression was part of the catalyst. “We were making less on every transaction, so we really have to be cost efficient,” he said. “Any dollar we can control, we want to control.”

Income calculation was the clearest example. Underwriters keyed figures into the agency tools by hand, so loan officers, processors and loan officer assistants learned income had to be recalculated long after the file had moved on.

“What I found that was really causing delays, back and forth, stress and friction was where we have unforeseen things that come up after the file’s been underwritten,” Hoyle said. “These are things we should have known at application.”

Making automated income calculations a requirement

Service First had evaluated income automation before, and ease of use was the first thing that separated Ocrolus, because the people using it every day are not all underwriters. Jessica Brindle, Operational Support Director, tested a competing product and “absolutely had to read the directions.” With Ocrolus, Brindle said, “95 percent of it I was able to stumble through and figure out without even having a demo on it.”

Service First then made the tool policy. “We had already laid the groundwork that this isn’t going to be an option,” Hoyle said. It is the same move we described in our look at compulsory AI and mortgage change management.

The requirement held because the Ocrolus income calculations held up. Every figure traces back to the document it came from, and representation and warranty coverage on the income calculations Ocrolus provides helped leadership make Ocrolus a requirement. “The reps and warrants that Ocrolus provides were a great way for me to do that,” Hoyle said. “That really helped push us forward with change management.”

Leadership paired the requirement with an incentive: a guaranteed same-day initial credit decision on qualifying files run through Ocrolus, against a prior standard of 24 to 48 hours. Automated submissions to the Fannie Mae Income Calculator removed a manual step, and the work stays inside MeridianLink, the LOS Service First has run for 13 years.

How Inspect catches mismatches before underwriting

Ocrolus Inspect compares borrower documents against the 1003 and flags discrepancies before an underwriter touches the file. Brindle pointed to employer names as one example.

“I’ve noticed a lot more where employer names are slightly different,” Brindle said. “We used to always have to manually write a condition to tie them together, but now Inspect is helping.”

The mortgage cycle time results

In the first two months, about 20% of files got a same-day underwrite. That rate has since climbed to as high as roughly 40%, moving with loan parameters month to month. Average time from application to clear to close fell to 19 days, and Service First has seen more Freddie Mac recommendations since the integration went live.

The result that does not show up in a report is the one the team feels most. “It cuts down friction dramatically,” Hoyle said. “An underwriter doesn’t have to be the bad guy on these things.”

For lenders working on cycle time, Service First’s approach came down to three moves: validate income at application, require the tool instead of offering it and give every team a number it can trace to the source document. Read the full Service First Mortgage customer story for the details.

Key takeaways

• Service First Mortgage reduced its average time from application to clear to close from roughly 22 days to 19.
• Same-day underwrites went from zero to as much as 40% of files, starting at about 20% in the first two months.
• Qualifying files run through Ocrolus get a guaranteed same-day initial credit decision, against a prior 24 to 48 hour standard.
• Service First made income automation a requirement, supported by calculations that trace to source documents and rep and warranty coverage on those calculations.
• Ocrolus Inspect flags mismatches between borrower documents and the 1003 before an underwriter touches the file.

FAQs

How did Service First Mortgage reduce its mortgage cycle time?

Service First moved income validation to the start of the file using Ocrolus income calculations, so income questions surface at application instead of after underwriting. Its average time from application to clear to close fell from roughly 22 days to 19.

How many same-day underwrites does Service First Mortgage complete?

Service First had never done same-day underwrites before using Ocrolus. About 20% of files got a same-day underwrite in the first two months, and the rate has since reached as high as roughly 40%, moving with loan parameters month to month.

Why does validating income at application shorten cycle times?

At Service First, income issues found after a file was underwritten caused delays, back-and-forth, stress and friction. Surfacing them at application led to fewer conditions and fewer back-and-forth conversations between underwriting and sales.

How did Service First Mortgage get its team to adopt income automation?

Service First made Ocrolus a requirement rather than an option and paired it with a guaranteed same-day initial credit decision on qualifying files. The requirement worked because every figure traced back to its source document, and Executive Director of Operations Dee Hoyle said rep and warranty coverage on the income calculations helped push change management forward.

What does Ocrolus Inspect do for mortgage lenders?

Ocrolus Inspect compares borrower documents against the 1003 and flags discrepancies before an underwriter touches the file. At Service First, it flags cases such as employer names that differ slightly across documents, which the team previously had to condition by hand.