For many organizations in the mortgage industry, front-office processes take precedent over back-office processes. In fact, a survey conducted by Forbes Insights in collaboration with Freddie Mac uncovered that only 1% of mortgage lenders in the United States have achieved fully digital back offices.
Since back-office operations rely heavily on document management systems, it’s safe to assume that most organizations in the industry have outdated document management processes. And outdated document management processes are error-prone and can significantly slow down front-office operations as well – regardless of the optimizations you’ve achieved there.
When mistakes occur on the back end, they – unfortunately – don’t just disappear on the front end. On the contrary, they typically grow into even bigger issues.
To avoid this unfortunate outcome, ask yourself if your document management process needs an upgrade. Here are some signs it does.
Documents Consistently Go Missing
A telltale sign your current mortgage document management process isn’t sufficient is that you’re constantly missing documents. This has proven to be a challenge for originators, servicers, and investors alike.
For originators, missing details and documents aren’t just time-consuming – they also increase the likelihood of investors finding loans defective. This leads to increased repurchase risk. Fannie Mae found that up to 60% of repurchase requests could be avoided just by eliminating missing documents.
When it comes to servicing, missing files and details are the primary source of quality control (QC) issues, as discovered in our 2022 servicing quality control audit analysis. Missing bankruptcy notices and proof of claim documentation was the number one finding identified during the analysis. These missing files not only result in wasted time and cost inefficiencies. They can also result in regulatory repercussions.
Incomplete loan packages can impact investors’ portfolio values as well. A loan package with missing documents is a less valuable investment, making the selling process more challenging and less profitable.
Loan File Integrity Is in Jeopardy
Today, servicers can obtain files from loan origination systems and other servicing platforms quickly and efficiently thanks to automation. The issue now lies in receiving and maintaining complete files that contain everything they’re supposed to and nothing they shouldn’t.
Some loans in servicers’ systems contain duplicates. Others contain documents from different loans. Both issues create an even larger one: poor loan file integrity.
If your loan file integrity is currently in jeopardy, your mortgage document management processes could be to blame.
Borrowers Are Unsatisfied
Are borrowers unsatisfied with your organization? If so, your document management processes may be at fault yet again.
Poor documentation systems extend loan processing times and cause unnecessary frustration for borrowers. In fact, according to a recent survey, missing documentation is a major source of mortgage borrower dissatisfaction. The survey revealed that nearly 40% of borrowers had to provide the same documents to their lenders more than once. This drove the net promoter score (NPS), which is a metric used to measure customer satisfaction, down 11 points.
Upgrade Your Mortgage Document Management Process
If you’re constantly struggling with missing documents, your loan file integrity is in jeopardy, and/or borrowers are unsatisfied, it might be time to upgrade your mortgage document management process.
The key to doing so effectively is to find the right partner. MetaSource maintains a suite of mortgage technology and business process outsourcing solutions for improving documentation processes for lenders, servicers, and investors. Our solutions include:
- Loan boarding
- Mortgage origination automation software
- Whole loan purchase review services
- Due diligence solution
- Cloud document management software
- Mortgage QC audit services
- MERS QA and compliance solutions
- Lien release and assignment solution
Interested in upgrading your mortgage document management process? Contact us today to speak to an expert or learn more about common mortgage documentation challenges and best practices for overcoming them in our guide.
The Ultimate Guide to Overcoming Mortgage Documentation Challenges
Learn all about the top mortgage document management challenges lenders, servicers, and investors are facing as well as how to overcome them.
