Since the recession of 2008, the housing market has improved as prices have slowly returned to pre-crisis levels. With the rise in demand comes heightened pressure on financial institutions to provide efficient and error-free mortgage loan services.
However, many banks struggle to meet this standard due to outdated manual processes and slow customer response times. Many lenders continue to enter loan data manually and often into multiple systems and vendor sites. While loan origination systems do a good job of pushing data to many vendors, lenders still spend a significant amount of time manually entering data, copying notes, separating and saving documents into repositories, and retyping information into borrower and loan officer communications.
All of this manual data entry significantly bogs down the mortgage loan closing and approval process, frustrating both bank employees and customers. It inevitably creates delays and errors as the complex process drags on, leading to dissatisfaction and disengagement.
On average, it takes approximately 45 days for a loan to be approved—creating customer dissatisfaction, slowing speed to revenue and jeopardizing complianceTheMortgageReports.com
According to a recent report by Capsilon: “Mortgage lenders are more concerned than ever about loan quality. A heightened focus on loan quality and compliance has led to ever-increasing loan production costs and has significantly lengthened loan turn times.”Compliance requirements alone have dramatically risen, with nearly 1,000 compliance changes implemented since 2008.
How can your bank address these challenges and deliver a superior mortgage loan closing and approval process experience?
Robotic process automation (RPA) can enable you to meet loan quality, compliance and cost concerns head-on. By automating repetitive and time-consuming manual tasks, your loan operations team will be able to focus on the more important details of loan applications. Data will be more accurate, reporting metrics can be tracked, and operational costs and loan timelines will be reduced.
RPA’s many benefits in mortgage loan approval process include the following:
SPEED TIME TO REVENUE
Software robots can be deployed to quickly and efficiently handle various mortgage loan closing and approval process, such as monitoring emails, pulling in data and documents from various internal systems, and reconciling data between enterprise content management and loan origination systems. With automatic collection and cleansing of loan data, you can quickly approve loan applications and generate revenue faster.
Due to the financial crisis and increasing regulations, as well as manual efforts to ensure mortgage investor and regulatory compliance, mortgage origination costs in the U.S. are three times higher than they were just a decade ago.Kofax
ENHANCE THE CUSTOMER EXPERIENCE
By accelerating the collection of required data, loan approvals can be delivered more quickly to enhance customer engagement and satisfaction. For example, a leading European bank automated the extraction of loan application data from a third-party portal and connected the information into their internal system and processes. As a result, they were able to quickly and efficiently present offers back to their customers, reducing response time from 14 days to just minutes.
REDUCE OPERATIONAL COSTS
RPA enables banks to reduce manual tasks, particularly around gathering and verifying documentation and inputting information into various systems, all leading to lower costs and efficiency gains. One leading bank achieved 100% automation, eliminating manual errors and rework. Also, by adding automation to the mortgage origination process, manual tasks and costs can be reduced in the post-closing process.
DECREASE RISK AND IMPROVE COMPLIANCE
RPA allows banks to verify the integrity of a loan file, an action that would normally be performed by employees. Software robots can automatically package up digital loan files as part of the quality control and audit review process. This streamlines the audit process and ensures all of the right documentation is in order.