Mortgage process automation is gradually getting mainstream today. It will continue being so because of challenges such as massive loan pileups, high staff attrition, surge in borrowers’ queries, dynamic lending regulations, and many more. This is impacting the day-to-day mortgage lending operations in terms of process efficiency and speed.
Lenders need to ideate and execute operational strategies to overcome these challenges. Mortgage process automation is a proven way to overcome most of these challenges. It is highly functional in driving efficiency and speed by automating most of the manual and repetitive tasks.
This article will explore the top 3 benefits of using mortgage process automation.
Accelerated Loan Application Process
Mortgage loan processing is typically a long-winded procedure. It involves several steps such application review, information verification, file submission to underwriters, and others. A loan file has to go through multiple touchpoints to reach loan closure. Dependency on manual labor and paper-based processes further prolongs the entire process.
Most of the manual and paper-based processes are the ideal candidates for automation. For instance, automation software can speed up document extraction, indexing, and management from loan files.
Lenders can use chatbots that issue automatic replies to customers’ query on loan applications. These chatbots are programmed to automatically retrieve relevant information from customers’ exiting database with the lenders.
Enhanced Credit Analysis
Automation assists a human credit analyst to accurately calculate borrowers’ financial scores. This is extremely critical for lenders to do risk assessment and take expedited lending decisions.
Mortgage automation software is enabled with machine learning algorithms and optical character recognition. This empowers automation software to extract and accurately read applicants’ financial data. It then maps the data into lenders’ accounting charts.
This allows mortgage lenders to immediately relay the credit score to loan applicants and arrive at a sound lending decision. Automated financial spreading tools aid in delivering expedited risk metrics. This is critical for a quick loan assessment.
Better Fraud Detection
Mortgage process automation software is driven by advanced predictive analytics models. It helps the software to flag and strike out applicants who have a higher risk level.
Automated file tampering solutions scans and efficiently identifies financial documents that are doctored or tampered. It specifically highlights the areas that were tampered.
Intelligent document processing is based on machine learning algorithms. It identifies purchase and expense trends in financial statements submitted by borrowers. In case a specific transaction does not align with the established trend, the file is flagged and is processed for further investigation.
It can be a costly proposition for lenders to procure and maintain mortgage automation software in-house. In due process, it will entail additional expense on staff training on how to use the software, maintenance expense, and IT management complexities. This is why lenders must partner with third-party mortgage solutions providers to access automation software. They can avail the software within a minimal upfront investment. It exempts lenders from the recurring overhead costs and management complexities.