The Gremzin Bank

Executive Summary:

The Gremzin Bank is a Century old Traditional bank serving customers of the Asian Continent for their Personal and Business Banking needs. They primarily contain Accounts, Insurances, Investments and Loan Products. Out of their loan products they have closed down commercial loans and currently do housing loans. But it has been observed that the legal verification of the property documents is not being completed on time and as well as not enough legal resources within the team.  This has led to lots of Cases being Rejected, or attracted by competitors.

Hence, management of the bank has decided to outsource the legal verification of the property documents to a third party legal and accounting firm. 

The Activities that would be outsourced are:

1. Collection of Property Document papers, including sale deed, will , Old documents, Proof of sale document etc. from the Loan applicant
2. With the Legal document visit the office of Registration and cross check if it is original.
3. Then from the court of law, verify whether there are any types of litigation or cases against the property.
4. Post positive results evaluate the current price of the property
5. Submit the above details as a report to the bank’s credit department.
6. Review document compliance, such as W2s, pay stubs, GFE, TIL, Form 1008, borrower's authorization etc.
7. VoE (Verification of Employment), VoD (Verification of Deposit), VoM (Verification of Mortgage), verification of property sale history, location maps, the appraiser's signature and license, registration, etc. Credit Check(s)
8. Review 3rd Party Documents
9. VA and FHA case numbers, order the VA and FHA case numbers online
10. Loan Estimate Preparation, TRID rules replaces the Good Faith Estimate (GFE) and initial Truth-in-Lending Disclosure with a three-page Loan Estimate.
11. Collect supporting documents, bank statements, mortgage statements, pension statements, escrow documents, divorce decrees and child support documents, homeowner's insurance and the flood certificate for the property etc.
12. Loan submission & condition clearing; submit applications to an underwriter for crosschecking eligibility and validating the documents submitted.

Performance Evaluation:

The performance criteria for third party vendors have been set against the following points by Management.

1. The Minimum number of Papers collected in a given day should be greater than 50 in 6 Different cities it operates in.
2. The Rejection ratio of loan cases because of error in reports should be less than 1 in 100.
3. Loan Selling time decreased because of early identification of errors
4. The Average time taken to complete one loan case report should be less than 72 Hours.
5. Any deviation on the above numbers can be accepted for 2 instances in a Month in a city
6. Quicker loan processing as off loaded those extra volumes from internal team of loan processors
7. Lesser escalations going to management team hence the corporate and branch relationships improved
8. Ability to scale up operations 3-4 times quicker than what  could be done internally
9. Moved rapidly from first process walkthrough to start of production within 5 working days while their internal training time for some of these processes were 2-4 weeks

Evaluation Criteria:

The following are the evaluation criteria for selecting third party vendors, as set by management

1. The Vendor should been in a similar business for at least 10 years
2. Should have dealt with at least 2 banks in the past
3. Should have not have Criminal cases pending against it in the court of law
4. Should have offices in all the cities
5. Should have at least 20 resources at its disposal in each city for our bank work
6. Should be able to deliver best and error free report.

Vendors:

As found by the facilities and administrative team there are a total of 4 vendors available in the market who satisfies all the above conditions. Since it is a coordinated work, it has been decided to choose one among the four and provide series of all the work from Paper collection until reports to One Single vendor, as that will be the productive method and less time consuming and more efficient way.