• Greggory B. Oberg, Esq.

Executive Reporting for Residential Lending: Part 1

A Reporting Framework

By: Jay Gallo

This past year at Spillane Consulting Associates, we were engaged by several clients to rebuild major portions of their residential lending business. While we put in plenty of time to get systems working, processes documented, investor contracts approved, loan officer agreements executed and marketing programs established, the conversations that required the most interaction with our client’s senior executives were performance and financial reporting.

Given our experiences with these organizations, we’ve decided to present a series of articles on Executive Reporting. In Part One of our series on Executive Reporting for Residential Lending, we will begin the discussion with a focus on an appropriate framework and presentation format for senior management reports. Actual recommended metrics will come in a later article.

Department managers had plenty of metrics that they wanted to review, but whittling down that list to what was essential for leadership to see on a weekly or monthly basis proved to be a lengthy exercise. Managers wanted to provide their bosses with as much information as possible. Executives, on the other hand, wanted the business to distill large amounts of data into critical information that would allow them to understand the health and trajectory of the residential lending business unit in a glance.

There was also significant confusion about the purpose of reporting. As I discuss later, it is important to understand who is reading a report and what they want the report to do. A periodic, historical summary requires different measurements and a different presentation than a report designed to facilitate quick, real-time decision-making.

Metrics Framework

We believe the following three-pronged framework works best for performance reporting:

  • Operational Efficiency – objective measures of processing flow and flow rate.

  • Quality Efficiency– objective measures of data completeness and perceived measures of quality from the customer, worker or manager perspective. This category should also cover your compliance with regulatory requirements.

  • Profitability Efficiency– objective measures of unit costs, idle time costs, staff costs, department costs and revenues per unit.

We know that anyone can measure one variable and look good. For example, if you focus on “days-to-close a loan” but don’t ensure that “declines” are within limits, your operations manager can always meet the DTC target by quickly denying a high number of applications and using the freed-up staff to focus on the fewer remaining applications. If you manage just one variable, it’s a singular view of efficiency; but if you can manage across all three prongs simultaneously, you will stop performance leakage and you will be measuring a business strategically. By measuring a department or business unit across all three aspects, we obtain a comprehensive view of performance and ensure that we are getting the overall results expected.

Targets, Trends and Peers

When developing Executive Reports, each metric should have a goal or target, and reports should show previous periods to allow executives to observe trends. While the right chart can convey large amounts of information quickly, focus on what your staff can produce today – a table or graph – without having to burn the midnight oil. Once you are producing quality information, you can train your staff to become more familiar with Excel charting capabilities.

You should also consider bringing peer data into your presentations. While your internal goals may be admirable, periodic benchmarking will allow your organization’s leadership to see how the institution stacks up against the local peer group or best-in-class regional competitors. Being the best local player may not be sufficient if out-of-market competitors are reaching into your backyard for business. A periodic benchmarking exercise will allow you to see the larger movement of the residential lending business.

Audience Expectations

Make sure you understand what your audience expects from these reports. Is it about status reporting or decision-making? Is your executive team looking for a daily snapshot that allows them to reset the business agenda and adjust resources for the next day, or are they looking for long-term trends to assist with capital investment decisions? Your may have a need for both, but it is rare for one report to facilitate both short-term and long-term decision-making.

Executive Reporting Pitfalls

Keep in mind the following which can make any report meaningless and cause great agitation in the Board Room:

  • If you have inaccurate, incomplete or out-of-date data, fix your data issues before you start reporting to executives and directors.

  • Extraneous information is not helpful to executives. Business unit managers need to understand the purpose of Executive Reporting. If it is to support decision-making, then you need to know what decisions the reports are designed to support and what your boss needs to see to make the decision. Make sure you clarify short or long-term.

  • You’d better have a tight answer when asked, “Does this report project a future, or is it just a rearview mirror?”

  • Don’t be afraid to change what you measure. It can take an organization several cycles to figure out exactly what needs to be reported. None of your day-one metrics may survive the first year. That’s not a problem. That’s successful evolution.

  • And finally, once the reporting is in place, be sure you have an effective distribution mechanism to get this information to the right people in a timely manner – especially if your reports are designed to facilitate real-time decision-making. Reporting last week’s numbers on this Thursday means executives have lost four days to see, identify and fix a problem.


This first article should get your organization thinking about periodic Executive Reporting on business performance. The next article will focus on some weekly metrics you should consider to track loan production. If the meantime, we want this article to serve as a launching pad for a conversation at your institution about Executive Reporting.

At SCA our best clients are relentless in measuring their business and holding people accountable. As one CEO stated, “You can’t change what you don’t measure. That means metrics, goals and reports.” So, put your executives and operational managers in the same room, and, using this article as a blueprint, determine what your organization should be reporting to senior managers about your residential lending business unit. When our next article comes out, you can see how we compare.

For more information or an assessment of your current reporting infrastructure, please contact Jay Gallo, Senior Consultant, at (781) 356-2772 or email at jgallo@scapartnering.com .


Jay Gallo provides strategy and risk management consulting to our residential lending clients. He typically works with senior executives to build new business units or improve existing operations.

Spillane Consulting Associates has served the residential mortgage lending business since 1991. We specialize in mortgage banking consulting services and provide quality control reviews, risk management, process consulting and employee training to credit unions, community banks and non-depository institutions. We are a thought leader on the strategic growth of residential mortgage lending.

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