Case Study

Guild Mortgage

Draw Funds Delivered In 48 Hours

246% YoY Increase In Renovation Loan Volume

Land Gorilla and Guild Mortgage

After extensive discussions, demoing the system, and meeting the leaders of Land Gorilla, we knew it was the right choice.

Erin Watts, vice president, product strategy, Guild Mortgage

Land Gorilla Confident Construction Finance

Land Gorilla thought of everything. There’s just so much functionality.

Erin Watts, vice president, product strategy, Guild Mortgage

Product Offering:

  • Renovation Loans:
    Fannie Mae Homestyle, FHA 203k
  • Construction-to-Permanent Loans (coming soon)

Goals:

  • Exceptional borrower experience
  • Configurable software and workflows
  • Expand renovation and CTP programs

Solution:

  • Construction Loan Manager SoftwareTM
  • Pre-Close Builder & Project Review Services
  • Post-Close Draw Management Services

Results:

  • 246%: Increase in renovation loan volume year-over-year
  • 48 Hours: Average time to fund draws
Land Gorilla Curve White

About

Guild Mortgage is a leading independent mortgage lender in the United States, specializing in residential home loans. With more than six decades of experience in providing loans, service, and expertise to homebuyers, Guild Mortgage upholds an enduring presence in the lending community. By strategically meeting the ups and downs of the real estate and financial markets, Guild has remained steadfast in its mission to provide affordable home financing, unsurpassed service, and a dedicated workforce to meet their customers’ needs.

Guild is now a nationally recognized mortgage lending company with close to 4,000 employees and 222 retail branches serving homebuyers in 30 states.

Visit Guild Mortgage at:
guildmortgage.com/renovation-loans/

The Challenge

Several years ago, the Guild product strategy team identified a need in the market. They observed low housing inventory, increasing home prices, and aging homes that needed updating. It became apparent that a good solution to address these issues was to offer borrowers better choices with renovation loans. Renovation loans allow people to take the home they currently live in and make it what they need and want, or renovation loans can help borrowers purchase and renovate an older home in need of updating.

Traditionally, borrower options for this included taking out a personal loan, a cash-out refinance, or using a high interest credit card. These are not desirable options for many borrowers. But the good news is that renovation loans are becoming a more well-known and popular option that allow buyers to borrow more based on the home’s estimated appraised value after improvements are complete. Guild felt that launching a renovation product that they could manage and service in-house would address this major need in the market.

“We’ve seen a lot of people are wanting to stay where they live,” said Erin Watts, vice president, product strategy, Guild Mortgage. “We wanted to provide a competitive product to help homebuyers renovate their home. Or if they wanted to live in an area that they love that was expensive, they could buy a lower-cost home and utilize a renovation program to make it their dream home.”

We wanted to provide a competitive product to help homebuyers renovate their home.

“Once we decided that renovation lending was something we wanted to do, the next step was determining how we were going to do it,” continued Watts. “And that’s how we came into meeting Land Gorilla.”

Initially, Guild worked with different correspondent investors, selling the loan after closing, with the end investor facilitating draw management. This turned out to be an expensive process for Guild and the borrower, and controlling the borrower experience was difficult. The borrower experience is very important to Guild, and as a lot of borrower engagement occurs after the loan closes, Guild made the decision to bring the program in-house.

Guild began searching for solutions through industry conferences and partner references. “As we discussed developing a renovation program with our major industry partners, they mentioned working with this really great team at Land Gorilla,” said Watts. “I knew that based on the vetting our partners had done with Land Gorilla plus what we had seen, it made sense for us to move forward.”

Following a thorough vendor search and demos of other solutions, Guild selected Land Gorilla. “After extensive discussions, demoing the system, and meeting the leaders of Land Gorilla, we knew it was the right choice,” said Watts. “Not only is the system robust in assisting lenders in managing their pipelines, but Land Gorilla also offers mission critical services to help manage risk and get the project completed. This was a necessity for Guild to successfully release this program.”

The Solution

Since signing with Land Gorilla, Guild Mortgage has achieved tremendous success with its renovation programs, experiencing a 246% year-over-year increase in renovation loan volume at the end of 2019.

“Since we began working with Land Gorilla in 2017, we have had an excellent experience,” said Watts. “Every loan is different. Land Gorilla has been very open to assisting us along the way, taking feedback and implementing relevant changes immediately. The responsiveness from their management and team members is excellent. We can always count on a quick email response or call back within hours. This makes for a great partnership.”

The Guild team found Land Gorilla’s Construction Loan Manager software to be very robust and easy to use. “There is so much information that goes into the renovation loan process,” said Watts. “Land Gorilla thought of everything. There’s just so much functionality. For example, if you need to upload a cost breakdown, the software can accept a line item breakdown, or a templated budget for our 203k loans. Or if you don’t have capabilities within your servicing group to provide escrow statements to the borrower, the software has that ability.” Land Gorilla’s Construction Loan Manager provides a number of robust software features including a fully digital draw management process, servicing tools to manage interest billing statements and escrow interest earnings, and an accounting feature to manage accounts, payments, reconciliation, and reporting.

The reporting feature has been a key tool in Guild’s workflow. “My team oversees the actual pipeline,” said Watts. “There are so many data points and details gathered during the process that can be utilized in reports. The software has a really robust reporting tool that lets you manage your pipeline. You can also create your own report templates with hundreds of different customizable data points. The software allows us to build reports that suit our needs.”

To be successful in this market, you have to pay contractors quickly. We work closely with Land Gorilla to make sure that we do that right.

Another important piece for Guild is Land Gorilla’s pre-close and post-close services. “This is imperative to our business model,” said Watts. “This helps our underwriting and post-closing teams feel at ease that projects are completed on time and in compliance with the requirements of Fannie Mae and FHA.”

Land Gorilla’s professional services team handles the review of builders and projects prior to loan closing. Once the loan closes, the Land Gorilla team manages the draw process including inspections, title updates, and lien waiver reviews. “All of this due diligence provides us with confidence to release money to the contractor,” said Watts. “We want to ensure that we have a really good project and everything has been completed and we’re making the right decisions whenever we’re going through a process and releasing money.” Additionally, Land Gorilla provides flexibility in what services Guild utilizes, offering an à la carte model. “That was a really neat option,” said Watts. “There are some companies it’s all or nothing, which would make it very difficult for us. I can tell Land Gorilla that Guild would like to handle certain pieces and we’d like them to handle other pieces. That part was very attractive to us.”

With the robust Construction Loan Manager software and flexible professional service options, Guild immediately saw positive results. “To be successful in this market, you have to pay contractors quickly,” said Watts. “We work closely with Land Gorilla to make sure that we do that right. We can typically order funds to be delivered to the contractor within 48 hours. I’m understanding the industry average to be up to a week or so. Having a turn time that fast within just a couple of days is very quick. This is really important to us as we look to expand our program.”

Guild Renovation Before and After

For Guild, their key to success in renovation lending has been ensuring the right tools and teams are in place, and building key strategic relationships.

“Renovation lending is a very specific program and there are a lot of requirements,” Watts said. “It’s not just your everyday purchase or refinance. Working with Land Gorilla allowed Guild to get to market quickly, helped give us a leg up and immediately gave us our own renovation department.”

Guild designates certain loan officers as renovation specialists that have extensive experience in originating renovation loans. They are trained in Guild’s internal workflows and the process with Land Gorilla. “I feel we’ve been really successful in that,” said Watts. “By centralizing the origination team to be the experts and take ownership of these loans, it really helps our relationships with our real estate partners as well as our borrowers. They know they’re in good hands whenever they’re going through this process because it can be much different than what they’re used to with a regular purchase or refinance.”

Guild also places special attention to educating and nurturing relationships with real estate partners and borrowers. “Our real estate partners are how we drive business,” said Watts. “We’ve created ‘lunch and learn’ programs where we talk about the product and talk about how to engage borrowers that may be considering renovation loans. We really try to help guide real estate agents to understand what the program is and what the value could be to their buyers.” Guild also provides a number of resources for borrowers on their website to explain the benefits and options in clear and simple terms, including an overview video and full program guide.

We can typically order funds to be delivered to the contractor within 48 hours.

The Future

Guild has been a trailblazer in the renovation lending market. They set out to educate the market about the tremendous benefits a renovation loan can provide, opening up many more housing opportunities for borrowers. With a streamlined and scalable process in place, and highly trained loan officers ready to lead borrowers through their options, Guild’s program has been met with excellent reception with plenty of opportunity to grow in the future. “We believe that we have refined our processes and work very well together with Land Gorilla. Today, we are offering the renovation program in a few states. Because of the success we have experienced, we are currently looking to expand to all states we operate in.”

In addition to renovation loans, Guild plans to expand into offering a construction-to-permanent loan program. As part of this program, Guild will be utilizing the Construction Loan Manager web portal for borrowers and builders, which will be fully branded to Guild. “To have the option to white label the web portal to blend with our own internal processes and systems, that is really attractive to us,” said Watts. “It’s an incredible system.”

Learn how Land Gorilla can guide you through a better construction and renovation lending experience

Land Gorilla Construction Loan Management Software
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