Mortgage processing services are essentially any services that mortgage lenders have to employ to process mortgage loans with. These services can be painstaking and time-consuming for your own personnel to handle. It can include sifting through, evaluating, and processing huge volumes of paper per mortgage application. It also requires highly trained underwriters and a massive support system to work together to move a mortgage application from origination to closing. Mortgage loan processing services need to cover a wide variety of functions from underwriting disbursements, and business acquisitions, to appraisal title checks and collections.

Mortgage lenders need a team of focused and highly skilled professionals to help them make informed decisions as to whether a borrower is qualified and can take on a mortgage loan. Poor lending decisions can result in foreclosures and huge losses for the lender, which makes it imperative for them to evaluate each applicant thoroughly. More and more lenders are looking to outsource their mortgage processing requirements to the experts. This is because complete validation, evaluation, and review of the paperwork involved for each mortgage application can be error-prone, costly, and subject to delays.

Here’s a look at some of the common challenges faced during mortgage processing services delivery.

Minimizing the TAT– Upon receiving a mortgage application, lenders have to conduct a thorough assessment to ensure the compliance of the application to the standard rules. It is then followed by taking the credit decision and processing an offer to the borrower. As much as straightforward the process may sound, it involves several rounds of going back and forth across departments to get the process done. Despite this complexity, a lender always faces the obligation to cater to a borrower’s expectation for an expedited closure.

Challenges in pre-underwriting This is an area where a majority of mortgage lenders falter. It requires superior domain-specific experience and expertise to execute tasks such as indexing and stacking of loan documents Both expertise and efficiency is critical in stacking and indexing of loan documents, preparing and conveying preliminary mortgage disclosures. A majority of these functions have to be executed through a standard process orientation to ensure that all the required tasks are done prior to taking up the underwriting process.

Workforce scalability– Mortgage lenders experience dynamic work volume depending on the time of a year. For instance, festive seasons and any special economic events can spur demand for loans. However, to keep a whole workforce at their disposal despite an undulating demand is a costly proposition for any mortgage lender. In an ideal scenario, lenders should have access to teams based on seasonal requirements and who can scale up to the demand. This not only unburdens lenders from additional costs but also provide respite from management complexities.

Adherence to regulations– The mortgage world has and will always be subject to dynamic regulations which will keep changing a lender’s landscape at frequent intervals. It becomes a cumbersome task for lenders to stay updated with changing regulations pertaining to tax information, legal approvals, among others to avoid any serious blunders in their mortgage processing services.

Critical Mortgage Processing Services That Need to Be Outsourced

Mortgage processing can often be process-driven and it requires huge manpower to evaluate and sift through all the mountains of paperwork per mortgage application file. The resources that are required are often not highly trained, which leaves room for major errors and complications. To ensure that each mortgage application is handled with the right care, lenders outsource their critical mortgage processing tasks to third-party experts in the field. Some of these services include:

Credit Scoring

A thorough credit check for borrowers is required to determine whether they exhibit the right credit behavior and have the relevant credit history to take on a mortgage loan. From pre-screening credentials to verifying Social Security statuses, no stone should be left unturned to gather the pertinent information required to make a sound underwriting decision. Identifying payment defaults, pulling credit reports, looking for existing loans, and evaluating tax returns should also not be overlooked in the process.

Document Compliance Review

It is also imperative that the borrower’s documentation is compliant with federal and state regulations. To that end, a review of all loan documents is required, such as Forms 1008 and 1003, Loan Estimate, pay stubs, etc. It is also critical that lenders obtain the appropriate VA case numbers online, if required. A comprehensive review of the submitted documentation is required to establish whether compliance requirements have been met or not to secure the mortgage loan.

Appraisal Ordering

Lenders also need to liaise with licensed appraisers to order appraisals for the property that is being reviewed for a mortgage. The appraisal will need to consider the loan-to-value ratio, loan amount, specific features of the property, and current condition of the home to determine whether the amount being requested is reasonable or not. Other factors they may need to consider include the location of the property and any recent sales information for similar properties in the neighborhood. All these criteria need to be assessed in depth to establish the home’s market value.


Exhaustive verification checks are required for all submitted documentation to determine that no fraudulent activities are being undertaken by the borrower. Employment (VoE), deposits (VoD), mortgages (VoM), and the property’s sales history will all be verified and assessed. All these will be evaluated to establish the authenticity of the mortgage loan that is being requested. This way, the lender does not encounter any losses in the future from defaulted loans or foreclosures.

Supporting Documentation Review

All supporting documentation will also need to be thoroughly evaluated and assessed to determine to what extent the borrower may be able to repay their mortgage loan. Such documentation can include homeowner’s insurance, flood certificates, Loan Estimate disclosures, etc. These supporting documents will need to be reviewed in-depth to ensure that the lender is able to mitigate their losses. A detailed review will ensure that no poor lending decisions are made in the process.

These are just some of the services that lenders are outsourcing, as carrying them out in-house can result in costly errors, extensive delays, or result in losses long term. Loan processing outsourcing has quickly become a common industry practice. This is because of its many benefits and how advantageous it can be to mortgage lenders of all sizes. So what exactly do lenders have to gain by looking to outsource their mortgage processing requirements? Let’s explore the many benefits in greater detail.

 Benefits of Outsourcing Mortgage Processing Services

  1. Access to Immense Expertise

One of the immediate benefits to outsourcing mortgage loan processing is gaining access to diverse experts across the mortgage industry. With decades of experience in the field, these experts are on hand at all times to provide the right solutions for every problem you might encounter. This could range from meeting new industry regulations to finding better ways to conduct property appraisals. By outsourcing your mortgage processing requirements to them, you are essentially letting the professionals handle your business. Instead of hiring personnel that may need to be trained and clearly lack in-depth industry knowledge from the get-go, you can work with the best by simply outsourcing. By working with the experts, your mortgage business does not stand to make any costly mistakes or suffer from any negligent errors during mortgage processing. This is because tried and tested measures with proven results are being employed instead.

  1. Expedited Turnaround Times

When you outsource loan processing services to experts, you can look forward to working with faster turnaround times as mortgage applications sail through the system with greater efficiency. Cutting down your turnaround time for each mortgage loan ultimately results in greater productivity for your business. This results in more mortgage loan applications being approved in less time. This increase in mortgage volumes will only serve to boost your revenues over time, leading to a more stable financial future for your business.

  1. Enhanced Customer Experience

By processing mortgage loan applications faster, customers can benefit from a better customer experience as less waiting is involved in getting their loans. This improvement in customer experience will only serve to build a better reputation for your business in the market and send more borrowers running your way. Your business will only rake in more profits as your customers find themselves less frustrated with the amount of time you take to process their mortgage applications. The ease and speed with which they secured their mortgage loans will help you differentiate yourself from other firms in the market.

  1. Reduced Overhead

Mortgage process outsourcing will help you originate more loans without needing to hire a costly permanent in-house team to handle growing business volumes. This will only lower your operational costs as it eliminates the need to hire and train more resources, pay more wages, or invest in more infrastructure to accommodate these new hires. Using staff on a contractual basis and ramping up resources when business picks up will only help you reduce your overhead costs long term.

  1. Focus on Your Core Competencies

When a third-party mortgage processing service provider takes hold of your mortgage processing requirements, you no longer need to follow-up with your clients. The outsourced mortgage processing company will follow-up on defaults and repayments so that you can focus on more important tasks. Some such tasks could be generating more business and better meeting your customer’s expectations. When you leave secondary, less revenue-generating tasks to the experts, you then create more room for you to focus on business development and other such strategic initiatives.

  1. State-of-the-Art Technologies and Tools

Outsourcing the mortgage loan process gives you access to some of the most effective automation technologies in the market from artificial intelligence and chatbots to Robotic Process Automation (RPA). These advanced technologies and tools can be expensive to purchase on your own.  When you do not have adequately trained resources to install them properly or handle their day-to-day functioning, it can be a problem. By leaving it to experts, you do not have to invest in the required infrastructure yourself. All you have to do is trust an outsourcing partner to improve your loan processing quality, time, and costs with their advanced technological capabilities.

  1. Curb the Amount of Resources Employed

When you decide to outsource the mortgage loan process to a third-party service provider, you ultimately reduce the amount of resources you will need to get the job done. Highly trained personnel will be handling all the approvals, documentation processing, and underwriting requirements with cutting-edge technologies at their disposal. This means that you can easily downsize the amount of resources you will need to employ. You can also cut back on the infrastructure, systems, and equipment you will need to invest in and manage as a whole. This is because the outsourced experts will rely on their own proven methods to execute mortgage loan processing in an efficient manner.

  1. Seamless Digital Alternative

Adopting automation throughout the loan cycle can be advantageous as it allows your customers to access information and get an update on the progress of their mortgage loan application in real-time. You can offer a seamless digital experience to your customers to help your business stand out from your competitors by outsourcing your requirements to a third-party mortgage processing company. Automation can also help you reduce errors in the process by carrying out important mortgage processing tasks without any manual human intervention. You can also provide your customers with a unique digital experience and real-time access to information that they would otherwise have waited months to get their hands on.

  1. Improved Scalability of Resources

Businesses that do not outsource their mortgage processing requirements to a third-party often find themselves struggling to stay profitable when business growth is stagnant. This is primarily due to the fact that personnel are hired on a permanent basis, even when business volumes are low. This results in higher fixed costs all round. Scalable resources are a better option as your business can adapt to growing or shrinking business volumes with fewer experts on hand, if need be. Fluctuating business cycles call for scaling up or down the amount of manpower you need. This is something that outsourcing your mortgage processing requirements can help with.

  1. Better Meet Compliance Requirements

You can also benefit from guaranteed compliance when you outsource loan processing services to the experts. This is because they are better equipped to manage compliance requirements without running into any hurdles in the process. For example, if there was a great deal of variance between the Closing Disclosure fees and the ones provided in the Loan Estimate, this data discrepancy could easily be sorted out by enlisting the help of your outsourcing partner. Rather than attempting to understand the reason for this discrepancy and fixing it yourself, you can delegate it to the professionals. They are also better equipped to record every step of the document audit process so that you meet the TRID rule during mortgage processing. This means that outsourcing can help you minimize your responsibilities on the whole. You will never again have to concern yourself with changing compliance regulations as the experts already have you covered.

  1. Less Following Up

A third-party mortgage processing company is equipped with the right processes that are needed to conduct efficient credit checks with minimal follow-up. You no longer need to call up your customers to ensure that they meet the minimum credit requirements as experts take the reins for you. Following up with customers and verifying that the data that was presented is accurate is easily accomplished with their extensive systems. In this way, outsourcing mortgage processing companies can save you money and time that could better be used for more profit-generating activities.

  1. Streamlining Complex Processes

There is a dire need to simplify and streamline mortgage processing so that no delays occur or complications arise so that customers can walk away pleased with their mortgage lending experience. Outsourcing your requirements to a third-party mortgage processing company can leave you with efficient processes. This is because the professionals go out of their way to standardize processes and simplify critical tasks so that they are executed in less time and with fewer resources. Because the experts will simplify your workflows to help you process more mortgage loans in less time and at a lower cost, you will benefit from more efficient systems and therefore, greater returns as well.

Outsourcing mortgage processing services to the experts can yield great benefits. Some of these include bringing in more revenue, as they often result in more streamlined operations, lower costs, and better resource allocation. Your customers can also walk away more impressed by their customer experience. This is because automation and other cutting-edge technologies can help them stay up to date with the progress of their mortgage loan application in real-time. Outsourcing all your mortgage back-office support services, from disclosures and appraisals to closing and title reviews, can help your business in a great many ways. If lower costs, higher quality, and more streamlined business processes appeal to you, relying on a third-party outsourcing partner could just be what you have been waiting for.

Who We Are and Why You Should Trust Our Expertise?

This article is brought to you by Expert Mortgage Assistance, a mortgage loan servicing solutions provider with over 10 years of experience catering to the prime US commercial and residential mortgage markets. Our experience in the industry gives us ample knowledge of what successful mortgage origination entails and what inefficiencies and complications to look out for to ensure that mortgage processing continues without a hitch.

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