TheMReport — News and strategies for the evolving mortgage marketplace.
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18 | M R EP O RT FEATURE biggest pain point in mortgage processing is document review and validation (32%), followed closely by completion of forms in loan origination systems (31%), document sorting (17%), and income calculations (16%). Mortgage workflows are rooted in a human decision-making process. That said, more than 90% of mortgage specialists surveyed indicated they would benefit from a tool that could automatically capture income information from submitted documents. In fact, automation can streamline mortgage processing at every step along the way, from origination and processing, to underwriting and closing. Freddie Mac noted that the most effective and profitable lenders are using digital technology to lower costs and reduce cycle times. Align Processes and Technology I ntegrating technology into the mortgage workflow can be challenging when a hot market has lending teams focused on closing loans. A slower market gives lenders time to ensure that human-centric processes are aligned with new technology. Optimizing human workflow with automation enables mortgage personnel to make decisions faster and more accurately. As loan volume decreases, more efficient loan processing can help improve margins, and profitability. An economical way to improve efficiency is for mortgage lenders to adopt technology that auto- mates document processing and validation. The key is implement- ing user-friendly solutions that require minimal staff training and provide mortgage loan personnel with assisted decision-making tools that ensure transparency and user control. Ensure Data Accuracy A ccurate data is mission-crit- ical for mortgage loan processing. As the market cools, lenders will have more time to implement solutions that improve underwriting quality, reduce turn times, and enhance the borrower experience. Successful mortgage lending re- quires a high level of trust among the key stakeholders. Accuracy is vitally important for everything from analytics to loan decisions. Automation that reduces errors and improves quality will help build that trust, both with mort- gage processing personnel and with customers. Transparency is a core com- ponent of building trust, and mortgage specialists rely on their ability to easily track, verify, update, and record data during every step of the loan process. Lack of transparency is another major pain point that mortgage loan automation technology can help address. Automation helps lenders improve transparency, leading to more trust, better ac- curacy, and improved regulatory compliance. Providing mortgage lending specialists with the ability to control and edit loan docu- ments ensures transparency, and establishes a trusted process. Integrate with Loan Origination Systems A nother opportunity for lenders during a market slowdown is to invest in opti- mizing loan origination systems (LOS) integrations. This starts by ensuring a good user experience for mortgage lending specialists. Lenders often use a multitude of third-party solutions. When mortgage volume is slow, it is the ideal time to ensure that all systems and software are tightly integrated, and are optimized to work with their LOS. A well-integrated LOS envi- ronment helps everyone—from Loan Officers and Processors, to Underwriters and Closers—get the most out of their automation technology. That leads to better workforce efficiency and a higher return-on-investment (ROI) for the lending organization. Replace Outdated Legacy Processes M any lenders still get bogged down with manual processes. In a low volume, low margin market downturn, they cannot afford the costs associat- ed with legacy loan processing procedures. Automation that reduces manual work tasks can lower costs and boost efficiency. For instance, automation software can help improve the speed and accu- racy of reviewing, and verifying mortgage loan documents. Technology can also help lend- ers identify inconsistencies in loan documents and potential fraud. By automating the due diligence process, lenders can reduce their risk of exposure to bad loans. One of the ways in which technology can help in fraud detection is through the use of machine learning models. A market slowdown provides an opportunity to dedicate resources to implementing artificial intelli- gence (AI) solutions that can help with everything from document processing, to fraud detection. Increase the Appetite for Technology W hile there is no panacea for a market downturn, lenders with an appetite for the right kind of technology can benefit from a slowdown by investing in a more automated future. Mortgage loan automation requires cooperation between the lending team and IT department. The goal of automation technolo- gy should be to enable mortgage lending experts to make decisions faster and more accurately. The key is to reassure mortgage loan specialists that technology is meant to improve their jobs, not replace them. Automation is a proactive step that lenders can take to help eliminate outdated manual processes and expensive over- head. The bottom line for fintech managers navigating a market slowdown is that lower volume presents a golden opportunity: use technology to reduce costs today and help prepare for a more efficient, and profitable future. SUZANNE ROSS is Director of Mortgage Product at Ocrolus, a document automation platform that automates credit decisions across small business lending, mortgage, and banking. Suzanne has a back- ground in mortgage that spans almost her entire career, and at Ocrolus, she spearheads mortgage product strategy, while expanding the company's offerings at a rapid pace. Transparency is a core component of building trust, and mortgage specialists rely on their ability to easily track, verify, update, and record data during every step of the loan process.