Managing trailing documents is a daunting task and a big issue for many mortgage originators, especially those processing up to 1,000 loans per month. Most don't have a separate department to handle this paperwork, yet it's critical to make sure everything is captured so you can be compliant, deliver the final title expediently and get investors all the necessary paperwork.
An emerging best practice for managing mortgage trailing documents is to utilize mailroom/PO box scanning services and workflow automation software.
Mailroom & PO Box Scanning Services
Instead of having your support staff open, sort and scan trailing documents received in the mail, and then having to index and QC the scanning process, mortgage originators are instead turning to business process outsourcing providers (BPOs) to do all of the above.
By redirecting all of your trailing docs to a BPO, you will ensure that they are processed as quickly as possible, in the highest quality available. Experienced mortgage BPOs can also determine whether or not the deed of trust has been recorded properly and that they are free of liens and judgements.
MetaSource is one such experienced mortgage BPO offering mailroom and PO box scanning services at four separate locations nationwide. We can also OCR and doc type everything that comes in to streamline the process.
Workflow Automation Software
What happens when trailing documents are missing? Workflow automation software helps to identify all documents needed as part of the mortgage file, like a checklist. Workflow software then automatically alerts your staff to follow up with the borrower for each document that's missing. Should they not be uploaded within the pre-defined period, reminders are sent to the appropriate parties.
Not only does this help ensure compliance but it also provides all the necessary documentation for sales to investors – and avoids Flagstar-like late charges of 0.005% per day if not delivered after x weeks. It also helps you avoid double loans and fraud.
While loan origination systems (LOS) can generate a report of missing trailing documents, someone has to remember to run it and to chase people down.
This is especially useful for titles to help ensure they're recorded within a reasonable time period (some states lag behind by up to 12 months) and tracking those needing to be re-recorded because of a missing page or other issue. It's easy enough to do the latter but having to send back the title back to mortgage lenders for notarization is what bogs down lenders. Mortgage lenders often just have one person that makes an attempt to track these documents down once a month for everything outstanding. Everything not captured then lags another month.
Best Practices Save Money & Minimize Risk
While outsourcing the scanning and processing of trailing documents and/or implementing workflow automation software may also feel daunting and does have costs and time associated with them, they can save you much larger costs from loan buy-backs and government lawsuits.