In today’s fast-paced world, data has become a driving force behind numerous industries, reshaping the way businesses operate and deliver their services. Despite the fact that it has been historically reliant on traditional practices, the mortgage industry is no exception. In fact, Mortgage Professional America (MPA) included data and analytics in its list of top new technologies in the industry.
But how important is data in the mortgage industry, really?
Let’s dive into the many ways data impacts the industry as well as how your organization can improve mortgage data management and the benefits you’ll achieve if you do.
Decision-Making
Data-driven decision-making is the cornerstone of the modern mortgage industry. Mortgage companies are now able to leverage vast amounts of data to assess risk, determine creditworthiness, and, ultimately, make more informed lending decisions.
Data extraction and document classification solutions, powered by optical character recognition (OCR), artificial intelligence (AI), and machine learning (ML) technologies, play a large role in this.
These solutions enable lenders to efficiently extract and utilize relevant information from a wide range of documents, such as bank statements and pay stubs. By automating the extraction process with these solutions, mortgage lenders can significantly reduce manual data entry errors and feel confident that the information they’re using to make decisions is accurate.
Borrower Experience
Mortgage data analytics and automation have revolutionized the way companies interact with borrowers. Now, borrowers can apply for a mortgage online, upload documents, and track the progress of their applications in real time. This not only expedites the loan approval process but also offers borrowers a seamless and convenient experience.
J.D. Power found that less than one-third of borrowers feel they’ve had an optimal experience. By leveraging data management and mortgage process automation solutions, you can ensure your borrowers get the experience they expect and deserve.
Fraud Prevention
Between varying home prices, interest rate fluctuations, and an amplified desire to go digital, mortgage fraud has increased over the last few years – and it has come at a cost. According to the Federal Trade Commission’s 2022 Consumer Sentinel Network Data Book, consumers lost $5.8 billion to fraud the year before. Meanwhile, mortgage lenders are often responsible for the unpaid loans that result from fraudulent schemes.
Data analytics are instrumental in detecting and preventing mortgage fraud – from schemes that involve false information on borrower applications to document fabrication to identify theft to wire fraud. By analyzing borrower data, identifying anomalies, and cross-referencing information, lenders can flag suspicious activities early in the application process.
This proactive approach saves lenders from financial losses and protects borrowers from potentially harmful fraudulent schemes.
Loan Boarding
Mortgage data management is also critical – and, without the right solution, often difficult – during the loan boarding process. Many mortgage servicers and subservicers struggle to find loan files, have incorrect data in their servicing platforms, and lack transparency of incoming loans. These challenges ultimately lead to poor loan integrity.
That’s why so many servicers and subservicers adopt loan boarding solutions that follow a proven process – from an initial data cleanse to data delivery. Here’s what an ideal process looks like:
- Upon receipt, your loan boarding partner eliminates duplicates, identifies corrupt files, and validates data.
- Each document is then classified by type and mapped to your taxonomy, so you can easily find them when you need them.
- Missing required documents are automatically identified.
- Data is extracted from your documents and compared to the data file in real time, eliminating stare and compare and ensuring the servicing data is what is on the documents.
- The accurate data is fed into your servicing platform and classified documents are securely stored in a cloud document management system for easy retrieval.
Prepare for the Mortgage Industry’s Data-Driven Future
Data has evolved from being a peripheral asset to becoming the lifeblood of the mortgage industry. Its transformative power is evident in every facet of the mortgage process – from loan origination to servicing. As technology continues to advance, data’s role in the mortgage industry will only become more prominent, reshaping the way mortgage companies do business and borrowers experience homeownership.
Embracing mortgage data management strategies that incorporate data extraction, document classification, and analysis is not just a choice but a necessity for those who wish to thrive in this rapidly evolving industry. Contact us today to learn how MetaSource can help you optimize data management and thrive.