In the first quarter of 2017,  the cost to originate a mortgage hit a new peak at $8,887 per loan, up from $7,562 in fourth quarter 2016 and just $5,985 in 2008. These rising numbers are no doubt disturbing to financial institutions, but even more disturbing are the hidden costs of a slow and expensive manual mortgage process.

That slow, expensive and manual mortgage loan experience isn’t so appealing to your customers, either. Amazon, Google and Netflix have spoiled all of us with digital self-service, giving us the ability to search, find, communicate, buy and save…all from a mobile device.

Now your customers want the same kind of experience from your bank. They don’t understand why they have to fax documents or scan and email reams of paperwork. They don’t see that you’re working hard on their behalf, because they have no visibility into their loan process and documents status. Sometimes customers are their own worst enemies, sending in the wrong or missing documents, screen shots instead of bank statements, or just taking their sweet time when the clock is ticking toward a timely close.

Lower mortgage origination and servicing costs (and wow customers)

The loan lifecycle is complex with a lot of moving parts. You can stay on top of it the old-fashioned way: add more people and continue increasing those origination costs at an exponential rate.Or, you can consider end-to-end lifecycle is complex with a lot of moving parts. You can stay on top of it the old-fashioned way: add more people and continue increasing those origination costs at an exponential rate.Or, you can consider end-to-end mortgage process automation.

Automating mortgage lending causes a positive domino effect through the entire process. It’s more than simply saving time with document indexing, although that’s a critical piece of the automation process.

Let’s take a look at five areas where process automation can positively impact your mortgage numbers:

Borrower communications: Customers painfully submit reams of paperwork only to encounter what they feel is a black hole: Did you get my stuff? What’s my status? Can you offer me a great interest rate? Will we close on time? Suddenly, they get an urgent and unexpected call that paperwork is missing or documents need to be verified. It’s stressful for them and time-consuming for you.

If you give borrowers great guidance, easy options for submitting documents whether paper or electronic, and immediate feedback on missing documents or signatures, the downstream process is smoother and faster. Underwriters receive complete, well-documented files that can be reviewed and decisioned more expediently, which decreases your average closing time and makes you and your customers happy.

Documents: Faxes and scans degenerate images and require manual verification, while electronic documents eliminate the need for verification and speed up the approval process.

Validations: Reviewing names, addresses, income, credit and other items is extremely time-consuming. Consider this typical scenario: Each borrower submits at least 8 documents like pay stubs, bank statements, W2s and tax returns, and each of these contains 5-10 data points to be reviewed. For a 20-second review per validation item on a 2-borrower loan, the total time just to validate each item is more than an hour per loan. An average loan processor looks at 6-8 loans per day, so most of their day is spent manually validating information.

With automation, these validations are largely on autopilot. Manual reviews are only necessary for exceptions, when the automated review identifies an issue. Beyond the origination process, automated validations can save significant time at closing, loan boarding, quality control and secondary market file audits as well.

Loan servicing: During loan boarding, separate streams of data and documents arrive. There’s often no comparison of the document data, which originated from human data entry somewhere in the process, to the spreadsheet or Loan Origination Software (LOS) or Mortgage Servicing Platform (MSP) data. The result? Mismatched and missing data causes servicing processors in boarding, escrow setup, customer service and payoff departments to spend a lot of time searching for data and documents and rechecking information.

By automating your mortgage loan process, downstream employees can access and use high-quality, verified data, saving time and frustration.

Compliance: There’s no feeling quite like the feeling in the pit of your stomach when you’re going through a compliance audit and you suspect there are unintentional data errors at multiple points in your process. Even if you’re proactive about compliance, you know that eliminating errors in a highly manual process is impossible. Process automation produces higher quality verified data, which produces a higher level of compliance and a higher degree of confidence for you.

Watch: Removing Risk from Mortgage Lending

Process automation can take your mortgage processing to the next level with business rules and workflow automation steps that extend beyond capture and document indexing. Learn exactly how much can your financial organization save with mortgage process automation. Appraise your mortgage loan process with our free calculator.

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