MetaSource Mortgage Blog

Top 5 HFA Outsourcing Myths, Busted

  • Monday, April 24, 2023

Outsourcing portions of your business processes is arduous to implement, results in a loss of control, and leads to unwanted staff reductions, right?

Wrong, wrong, and wrong!

But if your housing finance agency (HFA) believes myths like these, you’re not alone. Most HFAs think that outsourcing labor for tasks like loan purchase reviews, loan file indexing, quality control audits, and trailing document management will do anything but assist them in accomplishing their missions. Fortunately, that’s not the case. Let’s put our MythBusters hats on and dive into the top HFA outsourcing misconceptions.

Myth #1: Outsourcing leads to a lack of quality control and transparency.

When things go awry in HFA lending processes, the fallout has the potential to harm the lender partners or borrowers that housing agencies are dedicated to serving.

For this reason, many HFAs resist relinquishing control over their work to external players, like outsourcing partners. They fear that outsourcing will dilute their visibility into processes and lessen their control over work quality.

But that couldn’t be further from the truth. The best mortgage business process outsourcing (BPO) partners function as members of housing agencies’ teams. These workers can be foreign, but in most HFA instances, they are 100% U.S.-based. They perform the same tasks on the same platform as in-house employees, supplementing efficiency and execution.

The result? A blend of internal and outsourced staff working in unison to deliver on agency missions, provide a great lender partner experience, and ensure complete transparency.

Myth #2: Outsourced partners don’t understand the HFA space.

Many housing agencies believe that outsourced service providers specialize in private sector lending and have a limited understanding of how HFAs and other publicly funded organizations operate.

The truth is that well-rounded outsourcing partners have just as much knowledge of the HFA space as they do the private sector. Some even have direct experience collaborating with and executing on behalf of HFAs.

Now, you may be wondering: But what about state-specific HFA requirements?

While they are an added layer of complexity, top outsourcing partners have no problem adjusting to meet your unique needs. They have the expertise necessary to quickly master HFA-specific complexities, as well as down payment assistance (DPA), mortgage credit certificates (MCC), and bond requirements, and can even provide examples of how they’ve done so in the past.

Myth #3: Outsourcing takes too long to implement.

HFAs without prior outsourcing experience often imagine the implementation process to be complicated and time-consuming, but it doesn’t need to be.

Complexities that lead to lengthy onboarding times can sometimes arise when agencies must transition to new software. Fortunately, outsourcing doesn’t always involve new technological solutions. If your HFA is happy with the platform you’re using, your partner can instead focus on providing you with the human capital you need.

The right partner will make the implementation or onboarding process straightforward and un-intimidating. They will identify the additional staff needed and bring them up to speed on your agency’s existing systems, processes, and requirements. Done correctly, the onboarding or implementation process will mirror the ease outsourced solutions are intended to provide.

Myth #4: Outsourcing leads to layoffs.

For some, the term “outsourcing” brings to mind visions of mass layoffs and overall staff reduction…but it shouldn’t.

The best outsourcing partners augment agencies’ existing teams – they don’t replace them. They, in essence, work as a staffing safety net for HFAs.

And staffing is undoubtedly an issue today. Deloitte’s 2022 Global Outsourcing Survey found that talent acquisition is standing in the way of success for 50% of organizations and employee retention is standing in the way for 30%. That said, there’s no denying that staffing challenges are prevalent. Whether members of your staff are retiring or leaving to pursue other opportunities, the issues are there – and outsourcing can solve them.

Your agency can lean on a BPO partner to pick up the work your employees can’t handle on their own. Additional external staff can be scaled up or down depending on the volume of work, leading to increased lender partner satisfaction and alleviating unmanageable workloads for internal staff. This type of flexibility is an enormous asset in the current era of uncertainty, where special programs and needs arise (and end) without much warning.

Myth #5: Outsourcing is costly and unnecessary when business is slow.

When business is lagging, looking into additional, flexible staffing and outsourced solutions may seem unnecessary – and costly, especially for smaller HFAs. But slow times are, in fact, the perfect time to look into outsourced solutions – regardless of your housing agency’s size.

Since outsourced services are typically offered on a transaction-basis and don’t include any hefty upfront implementation fees, they help HFAs of all sizes avoid overspending when volumes are low and still meet demand when business picks back up.

And business is most certainly going to pick back up with increased federal and state government funds being issued to HFAs soon. Just last month, the Federal Housing Finance Agency (FHFA) announced that $545 million will be provided for affordable housing programs.

Housing agencies without a plan to hit the ground running when funds become available or volume increases might be left scrambling, which could impact their credibility with lenders and hinder their ability to achieve their missions.

By considering outsourcing solutions now and planning ahead, your HFA can simultaneously maintain financial stability, adjust staff as needed to improve turn times, strengthen relationships with lenders, and, as a result, serve more borrowers in need of affordable housing.

The Outsourcing Partner You Need to Thrive

If you work for an HFA and are ready to further explore the ways outsourcing can help you better deliver on your mission to borrowers, MetaSource can help.

We have extensive experience providing a range of services – including loan reviews and Homeowner Assistance Fund (HAF) Support – to HFAs of all sizes across the country.

Our team of mortgage industry professionals can help your HFA succeed – regardless of the whims of the market or the size of your organization. With a cost model dependent on volume, HFAs of all sizes can reap the benefits of outsourcing with MetaSource.

Contact Us to Get Started Today