Digitization Improving Efficiency in the Mortgage Industry

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Digitization Improving Efficiency in the Mortgage Industry Over the last decade, the term ‘paperless’ has become commonplace in the mortgage

industry.

Manual

loan

processing,

including

printing

documents and other conventional steps in the mortgage

and

mailing

process can be time

consuming, expensive and inefficient. Optimizing and streamlining the full range of mortgage operations via document conversion is proving really helpful as it enables cost-

and

time-savings,

reduces

resource

requirements,

and

allows

better

management of the processes in the mortgage chain. Loan processing and underwriting in a digital environment involves the conversion of paper documents into digital format and the continuation of all future transactions in electronic format.

ECM for Paperless Loan Processing Timeliness and accuracy are critical for

successfully

origination, phases

completing

closing,

of

Incorporating

a

and

recording

mortgage

electronic

the loan.

processes

into the process can make a big difference in both the cycle time and loan quality. Many firms are now adopting

enterprise

content

management (ECM) automation to manage mortgage processing and in the future.

now

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Features of ECM Systems Origination: ECM provides various mechanisms for documents in any format to be captured, indexed, and stored. It converts documents such as loan applications, employment forms, and bank statements to digital images and stores them securely in the repository for retrieval and processing. Once the application is in the system, the workflow verifies the completeness of documents and the associated data and routes them to the underwriter.

Underwriting: Underwriters have access to all loan documents from any location.

The system automates the review and routing of completed loan documents to determine the risk and expedite the loan closing process.

Auditing: The system ensures the completeness and accuracy of the documents by enforcing the organization’s policies and procedures. It checks whether the compliance standards specified for the documents have been met.

Shipping and Delivery: ECM solutions can simplify shipping and delivery process in the following ways. 

Providing secure and immediate online access to loan documentation for review by potential investors



Once

funding

is

secured,

the

system

makes

certain

whether

that

commitments made to investors are fulfilled within the mentioned time limits 

Documents containing contractual agreements with investors, commitment letters and communications between the shipper and investor are managed properly



Arrangements for preparation and delivery of loan documents is facilitated



Automatically sorts and prints loan files in the order preferred by the investor

Servicing – With the new system, customers and investors can be serviced with immediate updates. They can access any sort of information regarding the present status of the application or loan portfolio at any stage of the loan process.

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Advantages of ECM System Automation With ECM automation, the entire mortgage process can be streamlined - from loan application to approval, preparation of terms, closing/signing, ongoing account management, and reassigning mortgages to third parties. The procedure replaces all inefficient manual steps with efficient mechanism for data capture, file storage, and workflow. Other advantages include: Reduced Cost: Cost associated with, binders, toner, physical storage, courier, postage and shipping can be reduced. The money spent for employees can also be eliminated. Also: 

Decreases paper usage and handling



Reduces incidents of misplaced/misfiled hard copy loan documents



Eliminates the need for expensive physical storage space



Eliminates courier costs and associated delays

Time Saving: As, indexed documents can be easily located, the time required to retrieve them is considerably reduced.

Moreover, automation results in faster

approvals, speedier account preparation, quicker access to customer files, and more efficient use of labor to process the loan.

Collaborative File Sharing: More than one user can access the loan file simultaneously, thereby eliminating the traditional linear approach to underwriting and loan processing.

Improved regulatory compliance: Regulatory compliance will be improved by: 

Reducing exposure during audits by ensuring access to complete files



Employing disaster recovery and business continuity strategies

With electronic data capture, automated ECM systems also help minimize data entry errors.