The mortgage industry is being termed as an assembly line where work is divided among individuals with specialized skill sets and those who complete their specific tasks and send it down to the next person.
Needed, technology overhaul
Although lenders today use a variety of technologies to originate, process, approve, and fund loans, human intervention is still required to perform individual functions in the mortgage assembly process. Every automated mortgage loan approval still has people doing the final reviewing. The mortgage industry needs a technology overhaul.
The mortgage industry is torn between profitability and compliance. Added to that is the unpredictable volumes and snail-slow processes. These issues can easily be addressed by investing in mortgage technology solutions that will make processes leaner, agile, and seamless.
Fallacies that legacy players live by
Companies believe that by simply investing in already existing technologies like LOS they can improve workflow. However, at the most, such systems can only make processes a bit more streamlined. An assembly line concept should incorporate automation of all processes. Legacy systems tend to work in silos. The need of the hour is technologies that will cut across disparate sets and incorporate cross-functional decision capabilities.
At the core of innovative solutions should be a couple of important features: one of them being automated managed content system, which can supply information on pricing, real-time pipeline information from the originator, market data, etc. Such assembled content can immensely help take the right decisions at the right time.
The Power of PPEs
Another added feature integral to creating a seamless solution is product and pricing engine (PPE). Product and pricing engine is the answer to loan origination woes and the process of locking-in interest rates becomes a piece of cake. No more rate sheets and sophisticated calculations are involved. The mortgage origination software allows lenders to manage complex compliance issues.
PPE’s empower the loan officers to be abreast of market developments and alert their customers on-the-go. This helps them stay competitive in the market. Also, loan officers can offer side-by-side comparison of products. This helps customers understand the products better and then make informed decisions.
The CRM features of the system helps nurturing leads and luring them with matching products. Thus Product Pricing Engines (PPEs) are a powerful marketing tool as well. Coupled with intelligent analytics, these CRM components facilitate easy up-selling and cross-selling
Predictive analytics
Every loan application, processing and servicing transaction leaves long trails of data behind every individual. This data is invaluable asset for the discerning organizations. Studying the behavioral as well as transactional data of individuals, analytics software helps lenders decide on the eligibility of applicants and the probability of their defaulting repayments.
Intelligent software solutions help lenders also to provide reduced rates to applicants with clean history of repayments and to levy a premium on those with a bad credit history.
Right from origination through processing, valuation, approval, closure, disbursal and servicing, e-mortgage solutions have the potential to convert the entire mortgage lending and servicing transactions like an assembly line.
Assembly line mortgage is something that the industry can look forward to. But, it is not a perfect science. Not all decisions are appropriate for automation. Certain procedures like underwriting call for judgment. Multi-level communications will always be indispensable to a successful loan disbursal cycle. What is essential is sifting out the routine decisions and automating them. The point is to create a system that is designed to improve efficiency, compliance, and profitability of the mortgage marketplace.
