home / Mortgage Lending

Why AI-driven document automation is gaining momentum in a fluctuating housing market

21 Mar 2024
featured why ai driven document automation is gaining momentum in a fluctuating housing market

With interest rates reaching the highest since the 2008 financial crisis, the mortgage lending industry experienced a notable slowdown in 2023, primarily due to the “mortgage rate lock-in effect.”

With 85% of U.S. homeowners holding onto interest rates far below today’s average, many are hesitant to sell their homes and buy another at the risk of taking on a higher rate. This new challenge, high-interest rates, and a prolonged housing inventory shortage have led to an increasingly volatile market that’s pushed mortgage lenders to scale back operations.

Looking ahead to 2024, experts predict sales to grow, fueled by a gradual increase in housing inventory and a decline in interest rates. As the housing market fluctuates once again, lenders need to be able to scale their operations to meet changing demand quickly. Lenders who took advantage of slow market periods to streamline their processes will be better prepared to scale as sales grow. Now, AI-driven document automation is becoming a key part of those processes for lenders. 

How Ocrolus is enabling mortgage lenders to grow and scale alongside borrower demand

As mortgage lenders have continued to look for ways to reduce fixed costs and increase flexibility, Ocrolus has continued to grow and evolve, enabling more mortgage lenders to automate processes and improve their ability to scale.

Our intelligent document automation enables loan teams to classify rapidly and index more than 1,150 financial document types, capture critical data fields, and pre-populate income calculations for faster, more informed decision-making.

By reducing the need for manual input and other “stare-and-compare” work,  Ocrolus helps mortgage lenders improve their processes’ efficiency while increasing the accuracy and consistency of their operations. For example, Ocrolus now enables lenders to standardize their income calculations for most income types – including those with non-traditional income sources, such as self-employment and rental income, and VA, USDA, and FHA loans.

We are also expanding our capabilities to meet the evolving needs of mortgage lenders. Now, lenders can directly import income data into ICE Encompass fields and merge employers that are represented differently across documents, improving data handling while reducing processing time and errors.

6 steps to streamline mortgage underwriting with document automation

How lenders are scaling their operations with Ocrolus

Compeer Financial and HomeTrust are two prime examples of companies leveraging Ocrolus technology to streamline their mortgage processes.

Since harnessing Ocrolus to automate its bank statement reviews, Rural Living Solutions (RLS), a business unit of Compeer Financial, has significantly streamlined its underwriting process.

With Ocrolus, RLS can automatically classify financial documents from borrowers, transpose the necessary data into their loan origination system (Encompass by ICE Mortgage), verify income and determine a borrower’s creditworthiness. As a result, the RLS team significantly increased productivity and efficiency, helping them build a process capable of scaling alongside loan volume.

As the housing market fluctuates and evolves, mortgage lenders must adapt to remain competitive. Giving underwriters the ability to classify quickly and index financial documents, capture key data fields and pre-populate income calculations, Ocrolus empowers lenders to make faster, more informed decisions while minimizing the need for manual input and “stare-and-compare” work. Learn more about the advantages of AI for underwriters.

Book a demo today to learn how Ocrolus can help mortgage lenders improve efficiency and accuracy and quickly scale their operations alongside borrower demand.

Key takeaways
  • AI-driven document automation is critical for adapting to the volatile housing market, allowing lenders to scale operations efficiently.
  • Ocrolus helps mortgage lenders automate the classification, indexing, and data capture of over 1,150 financial document types, enhancing decision-making speed and accuracy.
  • Leveraging Ocrolus’ platform streamlines the lending process, reducing the need for manual input and improving overall operational efficiency.