Simplified process aims to make "saving the dream" 9 times faster for struggling homeowners
IN BRIEF: "Restoring Stability" does just that, aiming to help an estimated 53,000 families who are at high risk of default or foreclosure. The initiative uses federal funds. It's administered by the Ohio Housing Finance Agency, with housing counseling agencies across Ohio providing guidance to homeowners. Thousands of families have been helped so far -- and for those who seek help in the near future, a more efficient process awaits. Thanks to the work of a Kaizen improvement team, aptly named the "Save the Dream" Team, struggling homeowners will quickly know whether they're eligible.
FASTER: When the new eligibility determination process is fully implemented, it will speed along in 3-45 days, according to the team's calculations. That's about one-tenth of how long it has taken in the past, with the historic process time ranging from 67 to 375 days.
SIMPLER: The new approach has 56 fewer steps (44% reduction), 14 fewer decision steps (44% reduction), and 11 fewer handoffs (38% reduction).
BETTER: Loopbacks have met their match, with the new process eliminating 5 out of 6 (83% reduction). A loopback occurs whenever staff or a counselor need to go back to the applicant to get missing information or documents that should have been provided with all other needed items at the start of the process.
When mapping the current process (top), team members can feel overwhelmed by the sheer volume of steps, handoffs, delays, loopbacks, and other inefficiencies. But a detailed map is essential because it shows everyone how the process really unfolds -- and where it can be improved. This sets the stage for development of the future-state process, which in the case of the "Save the Dream" team involves 56 fewer steps and an estimated 90% reduction in process time (bottom photo).
The acronym is a long one, but that doesn't matter to Ohio homeowners who are struggling to pay their mortgages or are facing possible foreclosure due to a financial hardship. HFA HHF is a financial lifeline -- and now that lifeline is stronger thanks to an OHFA Kaizen team.
"HFA HHF" stands for the Housing Finance Agency Hardest-Hit Fund, which is part of the federal Troubled Asset Relief Program. The fund enables 18 states and the District of Columbia to develop innovative programs that help homeowners avoid foreclosure.
Ohio's program is called "Restoring Stability." Administered by the Ohio Housing Finance Agency, it provides help in five areas: Rescue Payment Assistance, Mortgage Payment Assistance, Modification with Contribution Assistance, Transition Assistance, and Lien Elimination Assistance. To make it all work, OHFA has partnerships with housing counseling agencies in all 88 counties. Counselors ensure a local presence as they help homeowners navigate the system, select programs that best fit their needs, and then submit their files to the state for underwriting review.
The system works well -- but OHFA leadership and staff felt there was room for improvement, especially with the homeowner eligibility determination process.
They wanted to increase the "pull through rate" -- the number of people who register and then go on to submit applications. They wanted to speed up the turnaround time, so that people who had submitted applications and documents weren't kept waiting. And they wanted to think big and move fast to improve the situation.
A Kaizen event enables people who work different parts of the process to share their perspectives and ultimately co-create a better approach. Engaging in conversation in the above photo are four members of the "Save the Dream" team: (L to R) Sunny Stumpf, Tiffany Eden, Michael Pires, and Desiree Travers.
That's exactly what happened. The OHFA team used the tools and techniques of Kaizen, working nonstop for five days. They didn't just tweak the eligibility determination process. They transformed it -- eliminating 56 steps, 14 unnecessary decision points, 11 time-consuming handoffs, and 5 loopbacks.
Before, it was taking a minimum of 67 days to move an applicant from registration (when they first enter the system) to funding, with the time ranging all the way to 375 days. The newly designed process will take just 3-45 days, according to team calculations. It's a 90% reduction that can make a big difference to Ohioans whose home ownership is in jeopardy.
Driving these projections are key improvements developed by the team during its Kaizen event. The biggest changes have to do with the various supporting documents that are needed to process an application.
There was too much variation, with documents being collected at different points along the process timeline. It sometimes happened that a certain document wasn't in the file right when it was needed -- by an underwriter, for instance. This added time to the process for looping back to the customer, followed by still more extra time waiting for the document to arrive. With more than 20 documents at play in the process (ranging from bank statements to hardship letters to copies of recent bills), loopbacks had become a common occurrence.
So team members focused on the "intake" part of the process -- where people who have registered themselves into the system take the next step and submit an application. The team was able to reduce document requirements. But more important, they redesigned those front-end steps in a way that standardizes registration. The website where people submit applications is being improved, with dropdown menus and other design changes to make it more user-friendly. The site will explain all requirements more clearly -- even showing sample documents in some cases so that applicants can see exactly what's needed. Guidance from OHFA staff will be available, so applicants won't have to rely strictly on what they see on the screen or in print.
With the improvements in place, housing counseling agencies will end up getting complete
packets of applicant information that include all the required documents. That doesn't mean there won't still be times when a needed document is not in the file. But the changes aim to make this the exception rather than a delay-causing routine.
Home ownership is personal, and its connection to the American Dream makes it a national priority. OHFA staff and Ohio's housing counselors are in this work because they care. Their commitment shines through in many ways, including in the group's self-selected name: the Save the Dream Team.