The current mortgage landscape is a highly competitive one. Speed, accuracy, cost efficiency, and superlative customer experience are vital to ensuring an edge in the crowded marketplace. In this scenario, if you can use the latest technologies to replace manual workflows, it can certainly empower modern-day lenders to enhance their performance and stand out among their prospective customers. Mortgage Process Automation
Particularly talking about the step involving processing of loans applications – despite being a key function, is quite an arduous, time-consuming task, and an error-prone one. It requires a significant time of a highly-skilled workforce to organize, assess and analyze the pile of loan documents minutely without errors. Executing it manually consumes a lot of time and attention and usually will affect the speed of even the most productive teams.
Introducing automation in the mortgage processing functions offers much-needed support along with raising accuracy & onboarding and a host of other benefits for the mortgage lenders.
Here, we look at what exactly is mortgage process automation and explore the value proposition of adopting it for lenders.
What is Mortgage Process Automation?
Mortgage Process Automation involves making use of modern technologies such as Artificial Intelligence to help with the long-winded mortgage processing function. This automation process is workflow-driven and is based on the same set of pre-defined rules that are followed by professionals to execute the task manually. By employing intelligently designed algorithms, the pace of task execution is remarkably expedited and the possibilities of costly mistakes arising out of human errors are largely minimized.
What are the Benefits of Mortgage Process Automation?
Mortgage Process Automation onboards myriad advantages for mortgage providers. Some of its key benefits include the following–
Reduces Cycle Time of Loan Disbursement
Disbursing a loan involves several steps ranging from reviewing applications, verification of information, getting appraisals from third parties, submitting files to underwriters, and so on. Introducing technology in these steps sharply reduces the amount of time and effort needed to execute these tasks as compared to manual execution.
As per a study, with the introduction of technology, Union Bank was able to achieve an almost 33 percent reduction in the turnaround time for digitizing their loan documents.
Minimizes Possibility of Human Errors in Processing
Long winded manual processes in any domain are commonly prone to human errors. Statistically speaking, as per IRPA, humans are likely to make as high as 10 percent errors while carrying out the steps in loan processing.
Goes without saying, in an industry like mortgage processing, mistakes could lead to devastating financial losses to the business. Errors, even if detected in time, could take a long time to fix. As mortgage process automation works with a set of pre-defined rules, the algorithms can produce error-free outputs within agile time periods and save the business millions of dollars.
Helps to Easily Detect Signs of Fraudulent Activity
With mortgage fraud witnessing a steady rise, it’s natural on the part of all lenders to exercise increased caution to mitigate possibilities of making losses. Statistics suggest that mortgage fraud levels have increased by as high as 37 percent since 2010.
In such a scenario, employing automation in loan processing helps to introduce the execution of caution seamlessly. With the help of predictive analytics, lenders get empowered to easily identify risky loans at the right time and thereby make better business decisions.
Minimizes the Overall Cost of Processing Loans
With faster disbursement of loans done accurately at scale, loan providers get the chance to attain greater overall cost efficiency from their hired resources. As per a study published on Housing Wire, automation has helped companies achieve lower labor costs by 50% along with a time reduction of 96%.
In addition, along with enhanced process accuracy, the cost accruing from mistakes is also sharply reduced. As per a study conducted by SourceMedia research, financial institutions typically presume costs arising out of compliance and processing errors in the range of $100,000 to $1 million.
Enhances the Customer Experience & Business Prospects
Disbursing loans is a long-winded process from origination to closing. The average actual cycle time varies from firm to firm depending on the speed and accuracy of their workforce, and the nature of their internal processes.
In today’s age defined by the philosophy of ‘caveat venditor’, customers expect speed, transparency, and personalization. They prefer to opt for a service provider who’s able to deliver these.
Using automation in loan processing workflows helps to introduce an unprecedented amount of predictability in the timelines necessary to execute lengthy processes and close the tasks. This comparative agility coupled with predictability right from the start helps to remarkably elevate the customer experience and converts into improved business opportunities.
Introduces Convenience of Simplified Auditing
As a mortgage lender, auditing internal processes from time to time is vital to ensure that regulations are complied with, and documentation is in order.
With the influx of technology in these tasks, these redundant worries are largely mitigated, and auditing becomes a very simple, agile process. This saves a lot of time and enhances the ability to respond promptly to risks and focus on business activities as compared to getting stuck in policing internal processes.
Eager to Consider Migrating to Mortgage Process Automation? Here’s how Peoples Processing Can Help…
Keen on embracing the benefits of mortgage process automation?
Allow our team at Peoples Processing to assist you. We are a one-stop solution for any mortgage assistance that you may need as we offer a host of mortgage services like processing, mortgage closing, post-closing, underwriting, QC audit, title search, non-QM, and many more.
With our industry applauded intervention, you can achieve a reduction in typical closing time by 30% and also benefit from significant savings in your operational expenses.