Mortgage Document Management Software: ApplicationXtender Case Study
Electronic Mortgage Origination Eliminates Paper, Streamlines Processes & Slashes Costs
A California-based mortgage lender that funds $85 million in home equity mortgages and lines of credit every month has retained its position as a leading home equity specialist by constantly improving speed, efficiency and the overall customer experience. The faster the mortgage origination process, the happier the customer and the more transactions the mortgage lender can perform. Leveraging technology has played a key role in the company's success.
In recent years, the company has undergone major IT changes, such as consolidating four operating systems to one single, open platform that enables them to communicate and collaborate with internal and external business partners. These changes alone, however, were not enough to meet the company's ultimate goal: to reduce the time for processing a customer's initial request to an approved contract from seven days to three days.
Monthly Volume of 400,000 Incoming Pages
To cut the mortgage origination cycle so dramatically, The lender knew it needed to move to as paperless an environment as possible. Approximately 7,500 mortgage inquiries are processed each month. To be pre-qualified, each applicant must mail or fax supporting documentation such as W2 forms, driver's licenses, birth certificates, and so on, to the company. Of these 7,500 initial requests, approximately 1,200 become approved mortgage contracts, each requiring the handling, creating, and storing of as many as 80-100 document types, for an average of 300 pages per file. In total, the lender needed to process approximately 400,000 pages of mortgage-related documentation every month. All that paper required many tedious hours of faxing, photocopying, sorting, tracking, filing and retrieving, and shipping.
High Cost of Storage & Government Compliance
In addition to impeding efficiency and slowing processes, the huge volume of paper resulted in high storage costs. To meet industry and government requirements, mortgage-related documents must be kept a minimum of seven years and remain readily available to ship to third-party investors when mortgages are sold. All the paper from previous and current mortgages filled rows of file cabinets in a storage room before they were sent offsite to a storage facility. The amount of space devoted to storage would only have continued to grow. Three full-time employees were required to manage the stored documents, retrieving files when necessary to send to government auditors or investors who purchased mortgages from the lender. Furthermore, because the government often imposes a 48-hour deadline for producing documents, the lender regularly spent an additional $65 in shipping charges per request to comply with audits.
To find the right content imaging and capture solution to complement its back-end systems, the lender conducted in-depth reviews of several imaging and document management solutions and their respective vendors and talked with other customers who faced similar challenges. As a result, the lender chose OpenText ApplicationXtender document management software and Kofax Capture document scanning software.
Instant Document Search & Retrieval
"We needed a robust repository and imaging capabilities that would integrate easily and seamlessly with our new mortgage origination systems," said a senior project manager at the lender. "ApplicationXtender was exactly what we were looking for." ApplicationXtender was easily integrated with the lender's loan origination system (RiLOS) and its underwriting system, SelectQual. Using the ApplicationXtender Web Client interface, the lender's mortgage officers, processors, and underwriters can now view mortgage documents directly within their web browser.
Immediate & Continuous ROI
Because ApplicationXtender makes it easy to define, configure, and deploy content management applications, the software was implemented within weeks the first phase of a paperless, electronic mortgage origination system for the lender. The lender immediately began to scan all locally stored mortgage documents into the new system, with plans to archive all mortgages ever transacted. Within two months, the entire room of file cabinets was scanned into the new system, enabling the former storage room to become much-needed office space.
"In the first two months we calculated a return on investment of at least $10,000. We easily justified adding two more high-speed scanners and estimate that we are continuing to save $3,000-$5,000 each month by slashing storage, shipping, and maintenance expenses," said the lender's project manager.
Web-based Access & Automatic Data Extraction
"Rather than go to the filing cabinet to pull out a big manila folder and look at the various sections of the mortgage, we can type in the mortgage number and bring up the entire mortgage package," explained the lender's project manager. "This increases efficiency and productivity for anyone who comes in contact with that mortgage as well as greatly reducing the risk of misplaced or lost documents." Thanks to the increased productivity and efficiency of its employees in the shipping department, the company is able to meet the growing volume of mortgage applications without having to hire additional staff or pay overtime. "Now our staff can easily handle the mortgage applications we receive each day and will be able to handle even more as volume increases," said the lender's project manager.
Because of its integration of ApplicationXtender with Kofax Capture, the system can extract values from forms and convert those values to XML to automatically populate RiLOS. Specifically, the lender is currently in the process of scanning all applications from brokers and the company will use Kofax to automatically populate RiLOS with the data contained in those forms. This technology will greatly accelerate processing of broker submissions, thereby eliminating many hours of manual data entry and expediting accurate data analysis.
Future Phases to Bring Further Gains
After initial implementation in the shipping department, ApplicationXtender is being rolled out to the 100 employees in the company's call center. "This will be the start of a truly paperless process in our mortgage origination," said the lender's project manager. In the near future, the company's 250 retail mortgage officers will also be able to increase efficiency and save time using ApplicationXtender. Prospective mortgage applicants fax these representatives a variety of documents for pre-qualification. Using OpenText RightFax, the representatives receive the documents electronically but lack an efficient procedure for storing these types of diverse, unstructured information. They have had to print out all the documents, sort and collate them, and walk them to the underwriting department. In the near future, the incoming documents will be sorted and indexed automatically and deposited in ApplicationXtender for easy, secure viewing. the lender anticipates that other areas of the company, such as compliance, escrow, and title, will also turn to ApplicationXtender to replace manual activities, eliminate paper, streamline processes, and cut expenses.
"With ApplicationXtender, we have an intelligent electronic system that efficiently captures, stores, and manages critical mortgage documents," said the lender's project manager. "It eliminates the piles of paper that used to encumber us and moves us toward our goal of cutting the mortgage origination cycle time by more than half."