This blog discusses the common challenges lenders face in mortgage loan processing, which often leads to lengthy and inefficient closing times. It highlights strategies to streamline processing, including automating tasks with Robotic Process Automation (RPA), utilizing AI/ML for customer insights, and leveraging Optical Character Recognition (OCR) for document digitization. The Digital Knowledge Operations™ (DKO) framework by Anaptyss offers a tailored approach to integrating these technologies, enhancing efficiency, and improving customer satisfaction.
According to Ellie Mae, the average time for closing a mortgage loan is around 30 to 60 days. The long time involved in mortgage processing is due to several factors such as the massive number of manual tasks involved, the bank’s policies and procedures for underwriting, and the borrower’s financial situation.
Lenders go through several challenges during mortgage loan processing. They have to comply with the evolving rules and regulations, keep the turnaround time (TAT) under check to get the pre-underwriting paperwork done and ready, and at the same time prepare loan papers and NDA documentation. The slow, unorganized, and labor-intensive process leads to inefficiencies in meeting customer expectations.
To stay competitive and offer a delightful customer experience, lenders need to make mortgage loan processing fast, and hassle-free.
Ways to Shorten the Loan Closing Time
Here are a few ways to streamline mortgage loan processing, enhance efficiency, and improve customer Net Promoter Score (NPS). These are based on automation solutions, data-driven insights, and managed services, as follows:
1. Automate tasks using Robotic Process Automation (RPA)
Technologies such as RPA can shorten the overall mortgage loan processing duration and increase accuracy. Lenders can adopt RPA tools to automate repetitive tasks such as pre-underwriting, loan documentation, organizing unstructured data, and speed up income verifications thereby reducing the dependency on manual, time-consuming tasks.
2. AI/ML-powered tools for customer insights & engagement
Deploying AI-based tools can increase mortgage processing efficiency. It can help digital lenders perform a variety of tasks such as analyzing the borrower persona to reduce default risks and provide swift responses to customer queries on a 24×7 basis. Tools with machine learning capabilities can help transform loan operations by increasing origination, minimizing compliance issues, and expediting online lending.
3. Extract and digitize documents using OCR
Technologies such as Optical Character Recognition (OCR) allow automated document extraction and digitization. OCR tools extract textual data from physical documents, scanned images, handwritten notes, etc., allowing the creation of a fully digitized and indexed document repository without any manual data entry. The applications of OCR can span the digitization of process documents, customer records, etc.
4. Analyze unstructured information with data analytics
Using data analytics, lenders can predict and prioritize loan accounts at risk of default and foreclosure, examine complex data and observe productivity trends. Portfolio analysis helps in saving costs, reducing loan processing time in mortgages, accommodating market changes and regulations, and enhancing loan processing efficiency.
5. Update borrowers on the timeline
Mortgage processing is time-consuming leading to inevitable delays. Providing borrowers with an upfront loan processing timeline can allay their frustrations or avoid them altogether. Lenders should list down all the tasks to be performed by the borrowers and within what time. As per lending industry think tanks, any technology that gives borrowers more control of the loan process can speed up the processing time significantly.
6. Leverage managed services to augment delivery
Outsourcing mortgage operations to a managed services provider can save time, enable scalability, and offer readymade expertise. Partnering with a reliable service provider can offer benefits of the right-shoring model, including scalable global talent, “follow the sun” delivery, risk mitigation, and business continuity. The managed services model can also ensure diligent delivery in compliance with regulations such as the Home Mortgage Disclosure Act (HMDA).
Streamlining Mortgage Loan Processing with DKO™
The Digital Knowledge Operations (DKO)™ framework offers a comprehensive solution for transforming mortgage operations through a seamless adoption of digital tools, domain-led consulting, and managed services through a scalable delivery model. The approach is highly customizable and data-driven, offering practical outcomes such as reduced loan closing duration and increased customer satisfaction.
Want to explore more about Digital Knowledge Operations™ and how it can help drive higher efficiencies for your mortgage services? Please reach out to us at: info@anaptyss.com.
