customer stories
American Federal surfaces insights early and streamlines conditions with Ocrolus Inspect
Customer Stories
American Federal surfaces insights early and streamlines conditions with Ocrolus Inspect
Mortgage | Classify, Analyze and Inspect (insights and conditions)
Founded in 1987 in Clifton, New Jersey, American Federal Mortgage Corporation (American Federal) has grown into one of the nation's largest privately held mortgage bankers.
American Federal first partnered with Ocrolus, an AI-powered workflow and analytics platform, to automate document indexing and streamline underwriting. Over time, it expanded into surfacing insights early and auto-generating guideline-backed conditions, so the team resolves them with borrowers in one pass.
Challenge
Manual file review meant defects surfaced late and conditions trickled in throughout the loan cycle, sending processors back to borrowers repeatedly and causing delays in closing.
Solution
American Federal uses Ocrolus across its workflow, with Inspect automatically surfacing insights and generating guideline-backed conditions, synced directly to Encompass.
Result
• When volume doubles, files move consistently without added headcount
• 29% reduction in overall underwriting time
• 2 hours saved per file and 6% fewer file touches per loan
• One upfront condition request instead of repeated borrower call-backs
• Fewer late-stage surprises and underwriter kickbacks, with red flags surfaced before closing
• Conditions auto-generated with GSE guideline references and synced directly to Encompass, eliminating manual authoring and hand-entry
Challenge: Surfacing what a file needs early
Before Ocrolus, reviewing a file meant reading every document by hand. Processors and underwriters identified discrepancies, missing items and red flags themselves before requesting them from the borrower.
"Ocrolus Inspect automatically analyzes documents rather than having to stare and compare at every bank statement and page of W-2s," said Andrew McElroy, Executive Vice President & Chief Compliance Officer at American Federal.
Ideally, everything would be in front of the borrower at once. Conditions that surfaced later in the process meant going back to customers for documents they could have provided up front.
"Borrowers don't like to be asked repeatedly for things multiple times throughout the process," McElroy said. The goal, he explained, was to "present the customer upfront with one set of conditions that will satisfy the loan throughout the cycle."
Solution: One complete file, ordered up front
American Federal uses multiple components of Ocrolus’ mortgage solutions suite across its workflow and appreciates the product's consistent evolution.
"The natural progression started with classification, then income analysis. We’re now adopting Inspect to surface insights and generate conditions. It's allowed our staff to learn each portion of the product before they move on to take advantage of the next one," McElroy said.
Inspect works in two layers. Insights analyzes borrower documents against the 1003 and flags discrepancies before an underwriter touches the file. Automated conditions go further, generating each condition from documents, the 1003, AUS findings and GSE guidelines, with borrower-specific descriptions, Selling Guide citations and direct Encompass sync.
The aim, McElroy said, was "to find a technological way to have the file reviewed and identify potential defects early in the process without the underwriter having to touch or see the file." With conditions ordered up front, borrowers receive one complete request instead of repeated follow-ups.
Result: Double the volume, same headcount
The clearest payoff shows up when volume climbs. The team keeps files moving at the same pace, even when application volume doubles.
"When our volume has doubled, using Ocrolus has allowed us to continue to move files at the same speed without increasing headcount," McElroy said.
"Inspect catches what a manual review can miss. “Inspect caught an address on a driver's license that wasn't anywhere else in the file. It turned out the borrower owned an undisclosed property, requiring a full loan restructure," McElroy said.
Insights and conditions now surface earlier, and the late-stage scramble has eased. "Since we've started using Ocrolus Inspect, we've definitely seen a decrease in late-stage surprises and kickbacks to the underwriter due to things that are discovered late in the process," McElroy said.
Key outcomes:
- When volume doubles, files move consistently without added headcount
- 29% reduction in overall underwriting time
- 2 hours saved per file and 6% fewer file touches per loan
- One upfront condition request instead of repeated borrower call-backs
- Fewer late-stage surprises and underwriter kickbacks, with red flags surfaced before closing
- Conditions auto-generated with GSE guideline references and synced directly to Encompass, eliminating manual authoring and hand-entry
Why American Federal recommends Ocrolus
For McElroy, the relationship stands apart from a typical vendor deal. "What's different about Ocrolus is that it's a true partnership. We can give feedback directly and see it shape the products, from early concept to what we're using day to day," he said.
"I'm excited for the future of the Ocrolus partnership. As we expand our usage of Ocrolus’ automated conditions, I really think we can create a holistic approach to reviewing an entire file from start to finish that impacts the borrower experience and our staff workflows," he said.
"There have been times since we've started using Ocrolus where our volume has doubled, and using the technology has allowed us to continue to move files at the same speed and pace without increasing headcount."
Andrew R. McElroy, Executive Vice President & Chief Compliance Officer at American Federal Mortgage Corporation
