Fix Your Mortgage Processes by Becoming Truly Digital

June 30, 2023

Contents

Go Beyond Conventional Solutions

Employee Experience is Equally Important

Digital solutions are revolutionizing every aspect of our lives today. Even healthcare claims can be settled within the click of a button today. Don’t feel like cooking at home? Order food on DoorDash or Uber Eats. Forgot to carry your wallet? As they say, ‘Venmo it’. Mobile phones have evolved into smartphones. You can control your household appliances through your phone—switch on lights, control the AC temperature and do so much more. Car dashboards have become very advanced—get tips to avoid traffic, calculate mileage and fuel consumption. There are endless examples from our day-to-day life.

The mortgage industry isn’t far behind. Digital loan processing systems have simplified mortgage processing. Customers can apply for loans, upload documents and sign contracts online which drastically reduces your turnaround time and increases efficiency.

As a lender, offering a digital mortgage process will help you reduce processing costs and improve customer service. It will also enable you to understand and assess consumer behavior by providing access to a variety of analytical tools.

Here are some ways in which you can create an efficient lending process. Think smart and start small—identify tasks that require automation

Manual mortgage processes can drive up your loan origination costs. As a lender, you can set up a more efficient process by assessing the lifecycle of a loan to identify the tasks which can be automated. Use robotic process automation (RPA) to imitate routine tasks that don’t require mandatory human intervention. RPA is quick and cost-effective. You can use it to streamline tasks like applicant information verification and compliance management. It can also help you generate regular reports.

Fannie Mae and Freddie Mac, the two regulatory bodies that regulate most mortgage loans, also advise automating loan processing using RPA. It lifts the daily administrative burden on employees and allows them to address complex issues and gaps identified by automated loan reviews. Similar to how you’re able to track your pizza or Amazon delivery, RPA also makes it easier to track the loan’s movement which ensures transparency and control over the entire process.

You can start by automating functions performed using standard checklists or guidelines—pre- and post-closing audits and underwriting are a few of them. Using RPA for these tasks will speed up the review process and minimize the chances of errors, enabling your employees to identify and work on high-risk loans.

Go Beyond Conventional Solutions—Do More with Technology

Technologies like artificial intelligence (AI) and machine or deep learning (ML) can make your digital lending process even more efficient by not just automating tasks, but also driving actionable insights. Data-driven insights will help you make informed decisions that ultimately optimize your processes and reduce costs.

According to a recent poll by Fannie Mae, a significant number of mortgage lending firms plan to roll out AI in the next couple years. As a lender, you can leverage digital loan processing systems to examine data originating across different functions and mitigate future risks, loan contingencies and changes. Using the right tools, you can assess borrower spending patterns, predict payment defaults, assess credit risks and provide sanctions accordingly.

The mortgage industry is not only highly regulated, but also closely scrutinized. Technologies like ML can improve the underwriting process through automated reviews. It can also unburden in-house teams, allowing them to make decisions based on credit policy guidelines and applicant data.

For instance, ML can study applicant patterns to determine their willingness to proceed with an application (are they potential future customers or mere window-shoppers?). This will help loan officers focus on committed applicants.

Employee Experience is Equally Important—Don’t Ignore It

With AI and ML you can also leverage solutions like chatbots and optical character recognition (OCR).

For instance, Barclays US uses machine learning to assess and study applicant grievances to identify the most common reasons for complaints. This could help them identify processes that require streamlining and determine if there’s a scope to automate them. Meanwhile, it gives their team the opportunity and time to focus on building stronger and more meaningful relationships with their customers.

According to a study by Juniper Research, chatbots in banking will help save $7.3 billion. Most lending institutions use chatbots in their customer service process to reduce human dependencies. Capital One uses Amazon’s Alexa to help customers review their balance, transactions and pay mortgage instalments in the click of a button.

A key advantage of using virtual chat assistants is that they’re available 24/7 to offer consistent solutions and advice.

As a lender, you can use chatbots to help employees stay up to date with evolving policies, speed up document review and study complex products to provide the right support and information to customers.

Reorganize Your Workforce to Complement Automation

Digitized processes will work for you only once you can identify the areas in which your team will best add value to processes and for customers. According to Mortgage Bankers Association, workforce expenses for financial and lending institutions in the second quarter of 2019 accounted for more than 67%. Industry leaders believe that digital solutions can help reduce these costs.

Your strategy must have a healthy balance of human intelligence and digital solutions. Here’s what you can consider:

Focus on recruiting a more agile and futuristic workforce; help them upskill and accelerate their journey
Recruit people who value the use of technology and are comfortable with its use—this will also mean repositioning the roles impacted by the digital shift
Create a human-first workforce that prioritizes service delivery and customer experience
Assess your business success using digital analytics and AI. Also train your staff to view AI as an enabler instead of competition threatening their job security.

Outsource Your Mortgage Operations Today!

At Aritas Mortgage Solutions we help our customers create a successful mortgage processing ecosystem powered by the right tools. We help you achieve processing quality, efficiency and reduce costs. Our expertise and ability to offer tailored solutions has been helping businesses deliver the true digital mortgage experience for over 15 years.

Make the shift, get in touch with us!