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How​​​ Mortgage Loan Processing Software is Transforming the Lending Industry

13 Jan 2023
How​​​ Mortgage Loan Processing Software is Transforming the Lending Industry

Mortgage loan processing software enables lenders to automate core and ancillary elements of mortgage application and origination functions through machine learning and artificial intelligence. Mortgage automation technology can transform how lenders receive applications, gather documentation, extract and record key data, assess credit risk, verify income, carry out anti-fraud checks, and underwrite loans, among other mortgage-related tasks.

As a result, lenders are able to markedly reduce redundancies and instances of human error, eliminate operational inefficiencies, and originate loans much faster than traditional mortgage processes. Moreover, machine learning and automation capabilities position lenders to improve the user experience with online and mobile application interfaces, and faster, more convenient application methods.

Maximizing mortgage loan processing efficiency

Mortgage loan servicing has traditionally been time-consuming and labor-intensive. Lenders have typically gathered and managed documentation manually, requiring substantial human resources and time to execute critical steps that necessitate meticulous and often specialist attention. Activities include identity checks, data entry, anti-fraud measures, credit background checks, and underwriting.

These core features of mortgage loan processing software empower lenders to optimize operational performance in various ways:

1. Pre-qualification and pre-approval tools

Mortgage automation software transforms the initial loan application and customer onboarding steps for the lender. These include high-volume documentation processing, data extraction, identification verification, and credit scoring, among others. As a result, lenders benefit from enhanced speed, improved accuracy, and lower cost.

2. Real-time document management and collaboration

The right mortgage loan servicing software can streamline processes, such as gathering, reviewing, and analyzing borrower-supplied mortgage documents. It can also classify documents accordingly, capture data fields, detect fraud, and support prompt document retrieval. Additionally, it can scale in line with mortgage loan demand.

3. Automated underwriting and loan decisioning

Machine learning and data analytics technologies can equip lenders to generate a highly detailed, more accurate understanding of each loan applicant.

Data analytics equips the lender to comprehensively and quickly identify, gather, and interpret relevant data on each customer. At the same time, machine learning empowers the lender’s system to continuously learn more about the customer, business, and industry data sets, identify patterns, and provide valuable data-driven insights to guide better business decisioning.

With these technologies, lenders can make more precise, faster underwriting decisions while simultaneously reducing the risk of awarding loans to bad debtors.

4. Integration with third-party systems

Lenders can use mortgage loan processing software to integrate with value-added third-party systems, such as credit reporting agencies. This enables organizations to choose best-in-class features and modules that fit with their business processes. Without integration, developing these features in-house tends to take a minimum of six months and up to two years.

How mortgage loan processing software can improve the loan process

40% of people surveyed in a Harris poll said they would leave their primary financial institution for a competitor that offered a digital experience similar to online shopping. And according to Salesforce, “66% of customers expect companies to understand their unique needs and expectations, yet 66% say they’re generally treated like numbers.” Customers demand an experience that is efficient, digital, and personalized. Mortgage loan processing software helps lenders to meet these demands.

Enhanced speed and accuracy

Consumers have become accustomed to fast or instantaneous decisions from businesses in other industries and the broader financial industry. They no longer want to go through a long and often in-person process but rather want fast, data-driven decisions and a digital process from beginning to end.

Advanced algorithms and data analytics position lenders to quickly generate a granular, detailed understanding of each loan applicant. This capability allows lenders to make highly informed, accurate, and fast loan decisions.

Greater transparency

Mortgage automation software can help provide real-time updates to borrowers, keeping them in the loop throughout different stages of the process. It also helps lenders improve transparency and build customer trust in a process that industry observers have historically viewed as opaque.

Improved compliance

Advanced automation can allow for better protection of sensitive data, mitigates compliance risks, and position lenders to better comply with regulations, due diligence, and reporting. It also helps lenders to investigate suspicious cases with fast access to high-quality data.

Automated workflows

Mortgage loan processing software allows lenders to free up large swaths of time typically spent on repetitive tasks such as data entry and documentation management. Additionally, it equips lenders to integrate with other software or platforms, such as loan origination software, that further improves decisioning and processing.

Enhanced customer experience

AI in mortgage lending drives customer experience performance by minimizing the time involved, from borrower application initiation to final resolution. It also makes it more convenient for the customer by migrating from in-person presence and paper applications to both online and mobile digital processes that are optimized for speed and ease.

Mortgage Automation with Ocrolus

Ocrolus is already helping leading lenders to digitize their mortgage loan process. With Ocrolus, lenders are able to accelerate decisions and enhance their customer experience by automating documentation onboarding and providing full integration with third-party providers, including Encompass LOS. Ocrolus also executes fast, accurate document management at scale, including detailed classification and convenient retrieval, and highly accurate data extraction and recording.

For optimal speed, Ocrolus efficiently marries technology and people with human-in-the-loop document processing automation. While technology takes care of manual tasks and enhances accuracy, it notifies assigned employees only when necessary for verification and validation purposes.

Ocrolus helps organizations meet the need for a modern tech stack by providing the requisite platform for a competitive edge and the ability to future-proof in an ever-changing industry. Mortgage loan processing software can help lenders originate substantially faster loans, reduce repayment default risk, and lower operational costs. Additionally, it positions lenders to optimize customer satisfaction by providing a faster, more accurate, and more convenient user experience.

Book your demo: learn more about how mortgage automation can transform your business processes.