Unfortunately, many draw departments aren’t equipped to succeed because many lenders are transactional in both culture and day-to-day executions—running efficient operations takes a back seat to closing and funding deals. There are several common signs of an underperforming draw operation or a firm that doesn’t place a priority on borrower service:

1. Unclear Draw Process: Mortgage originators or sales teams often do not communicate the specifics of how the draw process works during underwriting, or they don’t inform borrowers there is a specific process to follow. Many first-time borrowers are shocked to learn that an inspection is required for them to access loan funds. Once it’s time for the first draw, they forget what to do, and it’s not always clearly laid out on lender websites or loan documents.
2. Unclear Draw Funding Rules: Most lenders have rules and policies for what will and won’t get funded within a draw request. For example, it’s common for most lenders to only pay for materials after installation. Often, a lender’s capital partner will have conflicting or different rules, making the situation even more confusing for both the draw team and the borrower.
3. The Team is Understaffed or Experiencing High Turnover: Many lenders will not prioritize the draw function and will either rotate employees in and out of it (treating it like a junior training role for the business) or simply drive employees away after they’ve been yelled at by enough borrowers.
4. Inconsistent or Poor Communication Channels: It’s common for many lenders to use one group email to handle all inbound messages for draw requests. This creates confusion within the team about who has the responsibility to field the request or where various draw requests are in the process. It also makes the borrower worry that their email has gone into the void—causing them to call or email any employee they can get ahold of within the lender. Poor communication also extends to capital providers, who are increasingly involved in individual draw approvals and don’t have their own standardized processes.
5. Complicated Draw Forms: It’s typical for lenders to use a Word document or an Excel file to track draw requests and reconcile budgets across draws. When sending these forms across borrowers, inspection companies, capital partners, and lenders, mistakes invariably occur. These mistakes range from bad data entry to deleting important formulas, or worse, intentionally changing numbers. Managing spreadsheets, finding errors, detecting fraud, and repairing formulas is a tremendous labor burden on the draw team.
6. Uneven Results and Interactions with Inspection Companies: There are many issues to handle across traditional onsite inspection companies. It’s not uncommon for a single property to have five to six different inspectors, a range of findings, multiple credit assessments, and poor picture quantity or quality. Most of the large inspection companies use the same pool of inspectors, and statistically, most draws get cut by 20% (the range being from nothing to 80%). When borrowers want to dispute an inspector’s findings, it often takes two to three phone calls for the inspection company to track down the inspector to find out what happened or request a change. Fees are very unpredictable between property types, and many of them are hidden.

1. Create a Clear Standard Operating Procedure (SOP) for the Draw Process: Borrowers, general contractors, and their project managers want to know what to expect and how to manage the project. There should be clear guidelines for sales, mortgage brokers, the borrower, and the draw department. Most importantly for the borrower, this can be done with a welcome email or phone call, FAQ sheet, and a tutorial video. Whatever the policies, procedures, and processes are, they should be written down and communicated in a simple, clear, and concise manner.
2. Create and Get Firmwide Buy-in on KPIs: It’s a truism in business that one can’t manage what can’t be measured, so establishing KPIs and goals is vitally important. Possible KPIs for a draw department could be draws processed per week, response time to borrowers, mean-time-to-draw-funding, as well as many other options. Pick one overriding metric to be measured on and build the SOP and tools around that. There can be multiple KPIs, but a single one should be optimized for building the SOP. KPIs should also show leading indicators, such as measuring borrowers who have not requested a draw in several weeks or months, which will help the business highlight a potentially non-performing loan.
3. Templatize Your Budget Ingest: The draw teams at two leading lending companies utilize a universal budget tracking spreadsheet, featuring 70 job item options that align with 90% of the projects funded by the company. The spreadsheet's design focuses on simplicity, enabling borrowers to complete it easily during the origination process. Since its implementation, the tool has established a consistent baseline of information exchange between the borrowers and the sales team, improving overall communication and coordination.
4. Offer an Easy Draw Request Interface and Tracking System: There are many free form building tools that allow lenders to build a web form to funnel draw requests. These forms can then feed a templatized spreadsheet and additional add-on tools can be used to automate tracking of updates to the sheet for internal teams and borrowers. For a more automated and advanced solution, there are modern draw platforms that eliminate spreadsheets entirely, handle budget creation, draw requests, tracking, and communications. Sitewire is an example of a company that is leading innovation in this area.
5. Implement a Better Communication Interface than a Single Draw Team Email Address: There is a plethora of tools for interacting with borrowers that can establish a real-time or “async” chat. These tools can be easily wired into a CRM or LOS to keep interaction records. Focus on tools that have good mobile access or offer SMS/Text capability.
6. Treat the Draw Team as Support and Borrower Loyalty Heroes: Draw teams often take a back seat to transactional employees within many lender cultures. Celebrating how important the draw team is to overall company success will go a long way in preventing burnout, employee turnover, and unhappy borrowers.

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Raven Chanay helped Riverbend Lending scale from a localized lender in the Pacific Northwest to a national footprint in most major metropolitan markets and $1.5 Billion in originations. She currently consults with lenders who want to streamline their operations.