Chapter 39 — Exercises
Work these with the chapter open. Items marked † have worked solutions in the answers appendix; the rest are for your own judgment, your manager, or your study group. No answers appear in this file.
Where an exercise asks for a dollar figure, show the arithmetic. Where it asks for a date, give a day number and say what makes that day the answer.
A. Recall and definitions
39.1 State the difference between pipeline management and the origination process taught in Chapter 6. Write it as one sentence that a new loan officer could repeat back.
39.2 Define file velocity and explain why "the file took fifty-one days" is not a velocity measurement.
39.3 The chapter claims that noise is a safety signal and silence is a risk signal. List the four sources of noise the chapter names, and say what each one is doing for the loan officer for free.
39.4 A file goes quiet for exactly three reasons. Name all three, say which one is benign, and explain why an inbox cannot distinguish them.
39.5 Define capacity as the chapter uses it, and explain the difference between a capacity threshold and a capacity spiral. Which one describes what actually happens, and why does the distinction change what you would do about it?
39.6 Write one-sentence definitions of pull-through rate and fallout rate. Then state the question you must ask before any pull-through figure means anything.
B. File velocity: decomposition
Use the following constructed calendar for exercises 39.7 through 39.12.
THE THORNBURY LANE FILE — a constructed calendar [constructed teaching example]
Purchase. Contract executed day 1, naming a day-45 closing.
30-day lock taken day 11, expiring day 41.
DAY EVENT
0 Agent call; buyers writing an offer
1 Contract executed
2 Full application taken
3 AUS run — Approve/Eligible
6 Appraisal ordered; title ordered
11 Rate locked, 30-day, expires day 41
15 Title commitment received — clean
18 Appraisal returns at contract value
24 File submitted to underwriting
30 Conditional approval — 8 conditions
33 Six conditions cleared
40 Last condition cleared
41 Lock expires
42 Clear to close
43 Closing Disclosure issued and received
47 Closing and funding
39.7 † Decompose the Thornbury Lane file into the same seven stages the chapter uses for the Linden Street file. Give the day range and the number of days for each stage. Confirm that your stage days sum to 47.
39.8 In the third-party window, which order is the binding constraint, and by how many days does it exceed the other? What does that tell you about which vendor deserved a phone call on day 12?
39.9 † Two stages on this file are entirely within the loan officer's control and together consume ten days. Name them, give the days, and state what you would do differently in each.
39.10 The lock expired on day 41 and the file went clear to close on day 42. Assuming the same three-business-day Closing Disclosure count the chapter uses, what is the earliest possible closing date once CTC is issued on day 42, and by how many days does the lock miss it?
39.11 Express each of your seven stages as a percentage of 47 days, rounded to one decimal. State the total of your rounded percentages and explain any discrepancy from 100.0%.
39.12 Compare the Thornbury Lane conditions block (12 days) with the Linden Street conditions block (19 days). Both files had a "long" conditions stage. Argue that only one of them had a pipeline-management problem, and identify which — using evidence from the calendars, not from your impression.
C. Triage over a board
Use the following constructed board for exercises 39.13 through 39.19.
BOARD — twelve files, Tuesday 7:30 a.m. [constructed teaching example]
DIS = calendar days in current stage. Q = BUSINESS days quiet.
d+N = days from today.
# FILE STAGE DIS Q NEXT IRREVERSIBLE BLOCKING
-- ----------------- ------ --- -- -------------------------- -----------
1 Alder Ct PREAPP 26 14 credit report stale d+11 borrower
2 Bramble Way APP 4 0 intent to proceed d+5 borrower
3 Chandler Rd SETUP 9 7 APPRAISAL CONTINGENCY d+2 AMC
4 Deerfield Ln SETUP 3 1 lock expires d+22 title
5 Elmwood Pl SUBMIT 5 5 LOCK EXPIRES d+3 underwriting
6 Foxglove Ct SUBMIT 2 2 closing d+19 underwriting
7 Granger Ave COND 6 4 LOCK EXPIRES d+4 -- NOBODY
8 Hollis St COND 10 1 payoff expires d+6 servicer
9 Ironwood Dr COND 3 0 paystubs stale d+9 borrower
10 Juniper Row CTC 1 0 CD MUST ISSUE TODAY (d+4) LO
11 Kingsley Ct CLOSE 0 0 CLOSING TODAY 11 A.M. closing agt
12 Lockridge Way PREAPP 7 7 -- --
39.13 † Apply the chapter's two filters. List the file numbers that satisfy Filter 1 (quiet ≥ 3 business days), the numbers that satisfy Filter 2 (next irreversible date ≤ 5 days), and the intersection. Then name the single file that should get your first uninterrupted hour, and justify it in two sentences using the blocking-party column.
39.14 Rank the whole board by pure urgency — days to the next irreversible date, ascending. Where does file 7 fall in that ranking? Explain, in the chapter's terms, why that ranking is wrong and what it is measuring instead.
39.15 † File 12 has been quiet for seven business days and has no blocking party and no irreversible date. File 7 has been quiet for four business days and has no blocking party. Both have empty blocking cells. Explain why one is nearly harmless and the other is an emergency, and state the column that distinguishes them.
39.16 Files 1 and 12 are both pre-approvals that have gone silent. Write the two-sentence outreach you would send to each, and say what specifically differs between them and why.
39.17 † File 3's appraisal contingency expires in two days and the appraisal management company is the blocking party. Write the escalation you would run today, naming the level from §39.8, the exact ask, the trigger date for the next level, and the arithmetic you would bring.
39.18 File 8 has been in conditions for ten calendar days but has been quiet only one business day, and its payoff expires in six days. Is this file in trouble? Defend your answer using both columns, and say what a single-column board would have told you instead.
39.19 Your manager asks you to add "loan amount" and "estimated commission" to this board. Give the strongest argument for adding them, the strongest argument against, and your decision. If you add them, say exactly where on the board they go and why that placement matters.
D. Cadence and milestone communication
39.20 Build a milestone cadence for a 30-day refinance, using the chapter's cadence as a model. Name every milestone, say who receives each message, and state your floor.
39.21 † Rebuild the chapter's cadence arithmetic with your own inputs: a 22-file pipeline, a 45-hour week, 50% of it spent on acquisition, 1.5 unplanned contacts per file per week at 8 minutes each, 8 scheduled touches over a 6-week file life at 3 minutes each, and a 60% deflection rate. Compute the hours available for file work with and without the cadence, the per-file minutes per week in each case, and the net weekly gain. Show every step.
39.22 Rewrite this update so that it satisfies the chapter's rule about naming the next date: "Hi — just wanted to let you know we're still waiting on the appraisal. I'll keep you posted."
39.23 The chapter says the milestone list alone would not have caught the Linden Street dead window, and the floor would have. Explain the mechanism in three sentences, and give the day number on which the floor update would have been due.
E. Batching and the calendar
39.24 The chapter places the third-party block first thing in the morning. Give the reason, then name three specific requests on a purchase file that belong in that block and one that does not.
39.25 Your referral partners are two real estate teams who show houses on evenings and weekends, and half your borrowers work night shifts. Redesign the constructed day in §39.6 for that market. Keep the structure; move the hours. Then say which single element you refuse to move, and why.
F. The handoff
39.26 Write section 4 — "the soft spots" — of a handoff memo for the Fulton Avenue file: a self-employed S-corporation borrower whose accountant said "about \$9,500 a month," whose 24-month average is \$9,020.83, whose most recent year alone is \$8,916.67, and whose income declined 2.3% year over year. Three to five bullets. Flag what the underwriter will find before they find it.
39.27 The chapter's ownership rule says exactly one person owns the next action, with a standing exception. State the rule and the exception, then apply both to this situation: an underwriter returns a condition requiring a corrected instrument from the title company.
39.28 You will be out of the office for six business days taking a licensing examination. Write the coverage handoff for a 24-file pipeline: what you hand over, what you do not, and the three things your covering colleague cannot reconstruct without you.
G. Escalation
39.29 Write a Level 0 escalation, in writing, for a written verification of employment that is four days old on a file submitting Friday with a lock expiring in eleven days. Include the specific ask, the date, the consequence, and the trigger for Level 1.
39.30 The chapter calls the borrower "a sideways move, not an upward one." Give two situations in which routing a request through the borrower is genuinely faster than any escalation you could run, and one situation in which doing so would be inappropriate.
H. Pull-through and fallout
39.31 † You take 18 applications a month and 13 fund. Compute your pull-through and fallout rates to one decimal. If each dead file consumed 5.5 hours, compute the annual hours and the equivalent in eight-hour days. Then compute how many additional funded loans a year you would gain by reaching 85% pull-through, and express that in funded volume at an average loan amount of \$310,000.
39.32 Explain, in your own words and without using the word "hedge," why fallout costs a lender money on a loan that never existed, and why the pain is asymmetric between a rising-rate and a falling-rate market.
39.33 † Sort the following five dead files into the chapter's three buckets — credit, competitive, transaction — and identify which of them is actually the fourth cause the chapter names, misfiled as one of the three. (a) Appraisal came in \$22,000 short and the seller would not reduce. (b) Lock expired while a single condition sat; the re-lock priced worse and the borrower went elsewhere. (c) Borrower's employer eliminated the position on day 19. (d) Competitor quoted a lower rate on day 3 and the borrower left before the appraisal was ordered. (e) Home inspection found foundation movement and the buyers terminated.
I. Judgment
39.34 Your triage rule ranks by dates only. A referral partner who sends you eight files a year calls about a file that is genuinely fine and asks you to "make it a priority." Write what you say. Then answer honestly: does your triage rule change? Should it?
39.35 A colleague proposes improving the branch's pull-through by "being more selective about which applications we take." Give three separate reasons this is a bad idea — one commercial, one regulatory, and one about what the metric would then be measuring.
J. NMLS-style
39.36 An applicant submits a completed residential mortgage loan application. The lender takes no action for 45 days and issues no notice of any kind. Which regulation is most directly implicated, what is the notification period, and what are the possible actions that would satisfy it?
39.37 A file is withdrawn by the applicant before an underwriting decision is made. Which of the following is true? a) No record needs to be retained because no credit decision was made. b) The file is not reportable under HMDA because it did not close. c) The application remains subject to record-retention requirements and is reportable with an action-taken code reflecting withdrawal. d) The lender must issue an adverse action notice because the loan did not close.
(Answer the question and, in one sentence, say what makes each wrong option tempting.)
K. The Loan File
39.38 † Build the board around the Linden Street file. Construct twenty-nine additional rows of your own — realistic stages, days in stage, days quiet, next irreversible dates, and blocking parties — and place the Linden Street row among them exactly as the chapter gives it:
21 LINDEN ST COND 9 4 LOCK EXPIRES d+5 (day 42) -- NOBODY
Then:
- State your stage counts and confirm they sum to 30.
- Run both filters and give the intersection.
- Name the file in your intersection that should get the next hour, and say whether it is the Linden Street row. If it is not, explain what you put on the board that outranks a completed file five days from a lock expiration — and defend it.
- Write the one sentence you would send the settlement agent on day 37, with a date in it.
- Finally: compute what the eleven dead days cost, itemized. Include the lock extension, the days past the contract closing date, and one cost you cannot put a number on. Say plainly which of the three you think is largest.