More so than organizations in other industries, mortgage lending institutions continue to rely on antiquated business processes. These include complex legacy systems and fragmented databases that result in informational silos. A heavy reliance on human labor for manual tasks like data entry drives up costs, results in costly errors, and eats away at valuable time that employees could devote to improving the customer experience.In addition to inefficiencies in their processes, mortgage lenders are also facing challenges like increased competition and compliance costs. Increased competition has increased the rate of innovation while also reducing mortgage lending profitability. Customers expect excellent customer service and speedy application decisions that border on real-time. A reduction of mortgage lending fees has created a pressing need for lenders to reduce loan processing costs.Now more than ever, mortgage lenders must begin exploring and implementing innovative technological solutions like automation to remain competitive and ensure their long-term survival. In this blog post, we explore 4 different mortgage lending automation use cases to illustrate the potential uses of automation solutions in lending.
3rd party data push and pull services most common use case for mortgage lending automation
Traditional mortgage lending processes require employees to obtain, verify, and order information from third parties that is relevant to a borrower’s loan application. These include things like employment and asset verifications, credit reports, appraisals, and tax returns. Employees typically submit manual order forms to each vendor. They are often required to follow up to check on the status. Once received, the information must be manually reviewed and manually entered in their systems.And then there is the issue of payment and reconciliation. Many lenders manually pay each vendor invoice. Following payment, they are forced to manually reconcile accounts. Not only are these processes time-consuming but there is the very real possibility of human error.With mortgage lending automation solutions like intelligent process automation (IPA) banks can streamline the process of ordering third-party services. Lenders can set predefined that automatically orders the relevant services. The mortgage lending automation solution also receives, reads, and enters the information from the third-party’s report into the designated software system. These solutions also automate the payment and reconciliation process, as well as perform compliance functions like ensuring that invoices satisfy RESPA disclosure requirements.
