3 Signs Your Mortgage Business Could Benefit from Automation
Amid a backdrop of headline inflation, elevated interest rates, and declining demand for mortgages, lenders nationwide have been forced to devise creative ways to remain competitive and profitable. For some industry leaders, this means exiting channels and shrinking portfolios.
The good news? There is a way to excel without minimizing opportunities. Automation can be deployed throughout the entire loan lifecycle to reduce costs and increase accuracy, efficiency, and consumer satisfaction all at once.
But how do you know if mortgage automation solutions are right for your organization? Here are three signs you could benefit from them:
1. Poor Turn Times and Unhappy Borrowers
Customer tolerance for lagging turn times has plummeted. According to a McKinsey report, borrower satisfaction drops by around 15% if lenders take more than 10 days to approve or deny a loan application.
In direct competition with customer demands for rapid turn times is the simple fact that the manual processes involved in mortgage lending and servicing can be cumbersome and time consuming. Lenders and servicers who still use manual processes can quickly get bogged down in the mountain of documents and data.
If this seems like a hopeless situation, rest assured that it is not. Automation can reduce burdens on employees and, in turn, streamline processes and accelerate turnaround times.
Take mortgage origination automation as an example. This solution can bridge the gap between mortgage point-of-sale (POS) platforms and your loan origination system (LOS). It ingests and classifies documents from borrower-facing POS systems, and then extracts the data from those documents and validates it against the data in your LOS. The mortgage origination automation software detects discrepancies and re-routes them for resolution before releasing the data into your system. It can even streamline tasks, like appraisal ordering and NMLS validation, via robotic process automation (RPA).
With this automated process, you can eliminate the need for humans to perform repetitive tasks and improve data accuracy to achieve faster turn times and happier borrowers.
2. High Costs
The mortgage industry has been hit especially hard by rising interest rates and high inflation. As demand from borrowers has taken a nosedive, lenders have had to curb spending and trim budgets. Many mortgage originators have been forced to right-size to reduce costs. Some lenders laid off nearly 1,000 employees over the course of 2022.
Fortunately, investing in the right software solutions can lead to significant savings. Automation reduces labor expenses by streamlining repetitive and time-consuming tasks, including data entry and document management.
Mortgage automation software further reduces costs by increasing accuracy. Time and resources don’t need to be meaninglessly expended to manage and correct errors.
Throw in mortgage business process management services, like mortgage QC auditing, and you transition from a fixed cost model to a variable cost one. In other words, you gain an additional hedge against shrinking margins.
3. Shrinking Workforce
With banks and non-bank lenders alike laying off employees in an effort to right size, maintaining enough employees may not be a current issue for your mortgage company. It may not even be on your radar at the moment. But should it be?
What happens when the market picks back up again and your now reduced staff has to complete more work in the same amount of time? This situation may seem far away right now, but the fact of the matter is: even the most notable mortgage industry experts don’t have a crystal ball. When purchase volume will rise again isn’t written in stone.
Mortgage application volume just rose by 7% at the end of January, according to the Mortgage Bankers Association. And while 2023 is still predicted to be a low-origination year, jumps like this could leave lenders in a scramble to meet demand.
That’s where mortgage automation and outsourcing come in. The right solutions can help fill in the gaps left by worker shortages, which makes quickly filling vacancies less pressing than it might have been in the past.
Automation and mortgage business process outsourcing can also reduce stress on workers, so they can realize their full potential and spend less time on menial, tedious tasks. This is especially true for paper-reliant and document-heavy industries like mortgage.
Are You Ready to Leverage Mortgage Automation?
Automation can modernize your mortgage business and improve your bottom line. From increased efficiency, accuracy, and customer satisfaction to reduced turn times and costs, mortgage automation brings benefits you can leverage across every part of your business.
MetaSource helps lenders identify and implement the solutions that will save them time and money. To learn more, read our whitepaper: How to Streamline Mortgage Origination with Automation or contact our team.