How is Mortgage Process Automation Transforming the Industry?

Digital transformation has led to the seamless transition of a plethora of industries. The banking sector has had significant shifts under its influence, and the mortgage industry has witnessed massive improvements due to the inclusion of robotics. Given that it is a customer-driven and process-driven landscape, modern mortgage executives continually seek to improve the overall experience and optimize costs.

Photo by Tierra Mallorca on Unsplash

Today, business processes are on the cusp of another significant revolution led by robots. Previous waves of automation had introduced the leverage of machines to businesses, enabling them to improve their efficiency by leaps and bounds. With robotic process automation (RPA), the power of artificial intelligence (AI) and machine learning (ML) is expected to revamp the way the mortgage industry operates. 

This article discusses how the role of process automation is transforming the mortgage industry.

What is RPA?

While automation has been a critical feature in the banking industry for a long time, its uses have been limited to routine tasks and seamlessly processing monotonous functions without the need for human intervention.

RPA brings a hope of change whereby mortgage lenders can use automation to achieve process excellence and use machines to replicate the diverse roles of human beings. These machines can take decisions, access data from the existing loan origination systems, and perform the requisite checks to decide the route forward.

In the mortgage processing landscape, RPA can be defined as an application of technology that allows robots to perform any rule-based, repeatable, and workflow-driven tasks with ease. When leverage an outsource mortgage processing company, you will gain access to this technology.

The Institute of Robotic Process Automation & Artificial Intelligence defines it as the application of technology that enables a company’s employees to assign computer software or robots to capture and interpret existing applications to process a transaction, trigger responses, manipulate data, and communicate with the associated digital systems.

The Use Cases of Process Automation in the Mortgage Industry

Modern-day mortgage lenders have embraced technology and are seamlessly embarking on the path to digital transformation, including revamping processes like paperless processing, fraud detection, analytics, and more.

With the inclusion of RPA, several exciting use cases are driving the digital transformation initiative. Some of which include:

1. Enabling Digitization of the Back Office

The mortgage industry has been a paper-laden industry until now. However, with the recent changes and the drive to go digital, it has embraced the usage of automated tools to help revamp the overall back-office processes. Back-office tasks include accounting, administration, data storage, and staff recruitment. With mortgage process automation becoming a reality, it is expected to improve efficiency, optimize costs, and improve data regulation, thereby positively impacting the customer experience.

2. Vendor Billing Reconciliation

Mortgage lenders are continually in contact with multiple external vendors who handle various tasks, such as employment verification, appraisal, and more. These tasks are often repeatable and require humans to perform the same functions periodically. 

With RPA at the fore, lenders can now allocate these tasks to robots and figure out the tasks that would benefit the best when reallocated. For example, if there are diverse data formats, the machine may find it difficult to execute its billing tasks with utmost efficiency. However, if the same involves working with only a handful of formats, such as PDFs and DOCX, the robots can be tweaked to handle the requisite duties effortlessly.

3. Automated Loan User Assignment

There are at least 15 system processes involving multiple users that mortgage loans pass through as part of their processing. Most of these user assignment tasks were handled by an assigned team. But these manual processes are often screened via a loan origination process, which can be redundant and misleading. 

Therefore, lenders are reassigning these assignments to robots with proper load balancing, enabling them to ensure a smoother workflow. These machines are equipped with logic to minimize incorrect processing and decision-making.

4. Paperless Loan Processing

In the traditional scenario, the entire lending process would take up to two months. This meant that the process was labor-intensive and often prone to errors. Given the time manual processes took and the resources they hogged, lenders were looking for solutions that could improve the overall experience.

With digital transformation, mortgage automation shifted most of this paperwork online. It includes enabling hand-scripted signatures, loan documentation preparation and presentation, online transactions, and more. It has been a critical proponent in reducing the loan processing time to a few days. All of these have also helped cut down the costs per loan and ensured the efficient use of resources.

Wrapping Up

The mortgage lending space is becoming more and more competitive every passing day. Lenders have started adopting mortgage process automation in some form or other to stay ahead of the race and gain a competitive advantage. While some have successfully cracked the process, others have resorted to outsourcing firms to help them garner the requisite traction.