Project Docs - Audrey Hopkins

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Tax Cert Sales
Define Phase Tollgate
Green Belt Candidate: Audrey Hopkins
Project Manager: Tom Steinker
Date: March 1, 2012
Agenda
Produce a Project Charter
Document High level process
Conduct VoC
Next Steps
Lean Six Sigma Green Belt Training
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Project Charter: Bank Loan Process Project
Business Case:
Project Goal Statement:
The Bank may lose lien position on properties for secured
Home Equity accounts whose tax certificate is bought at
auction. We were at risk of losing $13 million in property
values last year in one HOST system alone. The total value of
taxes and associated expenses incurred was $4.2 million.
In the last month we lost $221,567.58 in account balances.
Additionally, there are OCC foreclosure procedures impacted
by this process.
Goal 1: Reduce the number of times the bank incurs a property
loss by 80% from a average of 5/month to 1/month.
Problem Statement:
Project Timeline:
If the property owner does not redeem the property by
paying the back taxes, fees, assessments and penalties owed
before expiration of the redemption period, and the investor
chooses to proceed with foreclosure action, the property will
be sold at auction for the amount of tax liability or some
minimum value as placed by the Taxing Authority. In 2011,
the bank paid out 1.1 million dollars in taxes and fees for 148
accounts in one HOST system (FDR) alone.
Financial Impact: Estimated annualized lost value of account
balances based on year to date is 2.65 million.
Benefit Category: Cost Avoidance.
Define
2/2/12–
2/29/12
Measure
3/1/124/1/12
Analyze
4/1/124/15/12
Improve
4/16/125/1/12
Control
5/1/125/15/12
Project Risk Assessment:
Identified Risks: Possible causes outside of department and
influence; multiple geographic locations; and lack of data.
Risk Mitigation Plan: Include stakeholders in the project; use
SMEs from multiple geographic locations; and we have already
started to collect data.
Project Scope:
Team Roles:
Current Scope: Limited only to loss by tax sale notice
Secured home equity accounts serviced in Brecksville.
Project Sponsor – Steve Cory, SVP, Executive Sponsor, Tom
Steinker, VP Default Management, Working Sponsor
Process Owner – Kathy Prorock, Manager Real Estate
Out of Scope: First Mortgage (Miamisburg)
Green Belt – Audrey Hopkins
Mentor – Janet Malecki
Core Team Members – Emily Kinzig, Vahn Knight
Subject Matter Experts (SMEs) – Pat Wickham, Mary Lucyk,
Rhonda Phelps
Stakeholders
– Steve Cory, EVP Lending Services, Adam
Lean Six Sigma Green
Belt Training
Vidmar, Finance PM, Default Management
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Project Risk Assessment - Bank Loan Process
Areas of highest risk involve
“possible causes outside of
department and influence”,
“multiple geographic locations”,
and lack of data.
Mitigation for “out of department”
causes is to include both up and
downstream stakeholders in the
project.
Mitigation for risk associated with
multiple geographic locations is to
have one representative from
representative location assigned
to the project as subject matter
experts.
Mitigation for lack of data is to
establish ongoing data collection
mechanism which will continue
through Control
Lean Six Sigma Green Belt Training
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SIPOC - Bank Loan Process
Supplier
• Tax Lien Investor
(usually through
attorney)
• Branch Office
Input
Process
Output
Customer
• Legal Notice (US
• Equity analysis
• Equity Analysis
• Customer Letter
mail, Branch office)
• Bank
decision
• Satisfy taxes and/or
fees on behalf of
customer
• Loan Centers
• County
• Loan Borrower
• County
• US Post Office
Borrower
goes
delinquent
on taxes
County
arranges for
sale
Receive
summons &
complaint or
sales notice
Research
validity of cost
and fees
Contact the
Borrower
Perform
equityFinal Decision
analysis
We are at risk from external Third Parties because part of the
process resides outside our control
Lean Six Sigma Green Belt Training
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Voice of the Customer CTQs - Bank Loan Process
CUSTOMER
VOICE DATA
PRIORITY
Default
Management
I want to reduce
amount of times
we lose property
Y
Default
Management
I want to avoid
third parties
buying the taxes
Y
Real Estate
Foreclosure
Team
I want to receive
notice of sale on
time
X
Real Estate
Foreclosure
Team
I want minimal
FTE impact
Not Critical
To Project
CTQ
Secure lien position
SPECIFICATION
No more than 1
missing
notice/month
impact
Receive
notification prior
to sale
Timely notification
Have at least 1
week’s notice
before the sale
Staffing level
0 new hires
Reduce the number of times the bank incurs a property loss
Lean Six Sigma Green Belt Training
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Next Steps
Measure Phase
Create detailed current state process
Conduct Measurement Systems Analysis
Determine Baseline (Y)
Lean Six Sigma Green Belt Training
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