MReport August 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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36 | TH E M R EP O RT FEATURE Another way that lenders can better serve the millennial bor- rower market is by leveraging data analytics to help them make more informed decisions and then applying automation to streamline the origination process, especially the repetitive tasks associated with it. "Technology will help lenders anticipate when borrowers may need help and allow them to stay fully engaged in the process." AI can also held reduce costs for lenders. Today, lenders spend a huge amount of money on extra staff to review and audit loan files to maintain compliance with lending regulations and investors. "With AI our industry has a real shot at solving these challenges for good, while at the same time creating a better borrower experi- ence," Cassada said, giving the example of how ML as a subset of AI was helping lenders reduce costs related to document index- ing and data extraction. "It will take time to evolve to this state, but with current advancements in rules configura- tions and the ability to verify and validate loan file data, AI will begin to be used more and more to augment current technologies," he said. The increasing adoption of AI has also given rise to complemen- tary technologies, which when bundled together are helping lenders save cost and time, and increase efficiencies. According to Fannie Mae's most recent Lender Sentiment Survey, Application Programming Interfaces (APIs) and Optical Character Recognition (OCR) are the top two technolo- gies with the greatest potential to help improve or streamline processes, according to lenders. In fact, 47% of the lenders sur- veyed said that ease of technology integration and adoption made API a favorable option while 41% cited the competitive advantages of API as a top reason to adopt this technology. New Additions T he industry is also seeing a growing focus on data integrations and exception- based management, as well as an increase in automation and analytics to streamline fixed costs and reduce processing times, according to Vella. "These tools ultimately enable lenders to make faster decisions much earlier in the origination process, which not only helps increase margins but also improves the borrower experience," he said. Vella also pointed out to the trend of outsourcing certain func- tions in the mortgage process to "help alleviate the stress of fluctu- ating volumes and fixed costs," as well as servicers using "early-stage analytics and new customer reten- tion tools to retain their customer bases and capture their borrowers' refinance opportunities before a competitor steps in." Today, the industry is also combining the benefits of ML tools with OCR to identify and extract data from documents more efficiently. "When combined with rules-driven automation, this has enabled some lenders to greatly accelerate borrower approvals through better control over the information collected and not unnecessarily going back to the borrower to ask for additional information they already have, which results in a faster and more convenient experience," Cassada said. "Beyond these tools, we're also seeing much greater use of APIs to integrate and exchange information between their differ- ent systems," Kharidi pointed out. "Traditionally, lenders have used various technologies like loan origination systems (LOS), pricing engines, and customer relationship management software separately, but today, these platforms can be easily integrated, paving the way for a real digital transformation in our industry." The Human Touch W hile it's all very good to increase efficiencies by automating a process, a question that is being increasingly asked is, "How do companies intend to address the fear associated with technology eliminating jobs?" While the threat might seem real, Friend said that people who are quick to adopt and master new technology have nothing to fear. "There is no hiding from the fact that better technology leads to greater efficiency through a reduction of repetitive tasks, which can lead to staff reductions and the loss of jobs. On the other hand, I'm seeing many companies promoting people who embrace new technology," he pointed out. "So as long as mortgage profes- sionals are able to learn and adopt new tools, there is nothing to be afraid of. Indeed, the people who are best at using new technologies will be the ones who will thrive and grow." Kharidi also observed that while there was quite a bit of unease about automation replacing human beings, this fear was "a bit overblown." "Technology is often a value- add for lenders. So much work loan officers and loan processors do is tied to mundane, repetitive tasks. Automation has the ability to free humans from this work by fast-tracking easier files, so their knowledge and expertise can be used to solve bigger challenges," he said. "Quite often, clients who are using our automated loan quality and auditing platform are simply redeploying their teams to focus on work that makes better use of their expertise." Giving an example of how technology was helping to optimize staff and redeploy their resources where they were actually needed, Cassada said that technology was "both a means to reduce costs and provide more flexibility to leverage the existing staff resources in a smarter way." "Our clients are using our regtech solutions to speed up the loan There is no hiding from the fact that better technology leads to greater efficiency through a reduction of repetitive tasks, which can lead to staff reductions and the loss of jobs. On the other hand, I'm seeing many companies promoting people who embrace new technology. —Josh Friend, Founder & CEO, Insellerate

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