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  • Dr. Andy Schell, Ph.D., DBA/MBA, CPA, CMB

Maximizing Profit Margins

In the intricate world of Mortgage Banking, achieving robust profit margins isn’t just a goal; it’s a strategic endeavor that demands a keen eye for operational efficiencies and astute financial management. As industry experts, let’s delve into actionable strategies that can elevate profit margins and bolster success in Mortgage Banking.


Here's the Trade Secret - Operating profitably is nothing new. Profitability occurs when revenue exceeds expenses. That's it. And we all know this. So, what's the issue? The challenging issue is selling a product when there are few buyers. The first step is accepting the market reality.


Unveiling the Profit Margin Puzzle

Profit margins are the lifeblood of any business, and Mortgage Banking is no exception. However, in this dynamic industry, profit margins can often be subject to market fluctuations, regulatory constraints, and operational complexities.


Defining Profit Margin

To begin, what is the profit margin? In simple terms, profit margin is the net income a firm generates based on its revenue or volume. In mortgage lending, the most common reference is to earning on volume. or the percentage of profit based on volume to generate a profit margin. A more complex view is to apply the profit margin formula to every line on the P&L to identify revenue on volume, cost of sales on volume, gross profit on volume, and net earnings on volume. Each of these calculations is a measurement of performance and should be monitored compared to a forecasted value.


The Quest for Enhanced Margins

Enhancing Operational Efficiencies: Efficiency is paramount. Optimizing operations minimizes overhead costs and enhances productivity resulting from implementing automated processes that could include AI tools to check for bank statement deposit activity.


Measurement of Everything: Measurement of financial and operational activities is essential for enhanced performance. Set a goal, define a path to the goal, measure the progress, and the goal is likely to be achieved because we adjust our activities to achieve success. We must cut expenses quickly and add expenses slowly.


Scalability Strategies and Strategic Partnerships: Building scalable models enables cost-effective growth. Structures that accommodate expansion without proportional cost increases fortify profit margins. Collaborating strategically within the industry and forming alliances can open new revenue streams and reduce operational costs.


Customer-Centric Solutions: Tailoring services to meet customer needs fosters loyalty and can justify premium services, thereby positively impacting profit margins. This requires training staff to identify and meet the customer's needs.


Perpetual Student: Be a life-long learner. Learn to always learn from every experience. For every task, identify what was done well and what could have been improved. Study new topics. An originator could study underwriting, and an underwriter could study sales strategy. Break out of any silo and learn how the other silos operate, and more importantly, seek to understand why.


There is no easy path. Business success is challenging and stressful. Mortgage lending is particularly challenged by the nature of the sales activity through referral sources. Assume every day is another challenge to overcome. Surround yourself with like-minded people who share and are committed to a vision and are good at what they do. This is called person fit and job fit. It is better to be small and aligned than large and wobbly.


The Intersection of Profit and Strategy

Efforts to maximize profit margins often connect with broader strategic objectives. Efficient operations, risk mitigation, and customer-centricity not only boost margins but also position a Mortgage Banking firm for sustainable growth and market resilience.


Maximizing profit margins in Mortgage Banking is an ongoing journey—a commitment to continuous improvement. By embracing these strategies and fostering a culture of innovation and efficiency, Mortgage Bankers pave the way for heightened profitability and long-term success.



Dr. Schell and the MBS Financial Services team help firms implement a profitable operation.


MBS Financial Services supports the following areas:

  • Growth Strategy – We can help you plan and execute a growth strategy.

  • Hedging & Pipeline Risk Management - Dr. Schell can help explain how hedging functions, the benefits of hedging, and the risks associated with the activity. See blog posts.

  • Technology must align with a firm's strategic objective. Every mortgage lender's technology infrastructure significantly impacts its customer experience and employee workflow. MBS will help select, configure, and deploy the best technology solution.

  • Executive Development - Leadership is a learned skill. Dr. Schell can teach you to be an amazing leader, an effective manager, and an inspiring coach who can foster a vibrant culture.

  • Accounting Services – Dr. Schell, CPA, leads the accounting services team to become your outsourced accounting department. This alternative makes more and more sense for companies wishing to focus on their core business and also want trustworthy accounting and financial reporting support.


About Dr. Schell:


Dr. Andy Schell, Ph.D., DBA, MSML, MBA, CPA/CFF, CMB


Dr. Schell is CEO, Managing Partner, and Co-Founder of Mortgage Banking Solutions and the Founder of MBS Financial Services ("MBS"), based in Austin, Texas. Dr. Schell is known for his ability to turn "vision into reality" and "chaos into order" as he finds creative solutions to the challenges his clients face addressing Revenue Stability, Technology Enhancement, Financial Management, and Workflow Efficiency.


He has 4 decades of experience as a strategist where he has directed the activity of both small and large groups of employees including mortgage lending activity at Bank of America. His leadership knowledge extends from his hands-on experience and his professional designations as a CPA and a CMB, and from his doctoral examination of employee dynamics given leader stimulus and strategic communication.


To find out more information on MBS Services, please click HERE



Find more information at

DoctorSchell@MBS-Team.com ; (512) 501-2812;

Doctor Schell the Profit Doctor

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