The mortgage industry runs on multiple rules. These rules govern the way business is conducted in the industry. Such rules pertain to compliance, credit score, eligibility, workflow, and many more. There are two major challenges when it comes to managing these rules. Firstly, most of these business rules are extremely dynamic in nature and change at the drop of a pin. Secondly, the rules are haphazardly distributed across multiple mortgage departments. These two challenges make it difficult for lenders to stay compliant with changing regulations.
The Role of Business Rule Engine in Mortgage
Lenders have been using loan origination systems (LOS) to maintain and manage business rules. LOSs are embedded with business rules. For instance, it is programmed with rules to generate fees specific to loan types. The same LOS can also be programmed with another business rule that ensure that the fees are compliant with mortgage-related regulations.
However, lenders require experts with separate sets of skills to program LOSs with different business rules. An LOS has to be coded in different ways to accommodate separate mortgage business rules. It adds to lenders’ maintenance cost overheads as well as resource management complexities.
It is at this point when business rule engines gained prominence as mortgage process automation became mainstream. A business rules engine is a sophisticated software that is designed to manage multiple mortgage rules efficiently.
The rule engine based on mortgage automation principles automatically segregates and configures rules. This eliminates the need to create separate codes to accommodate every single business rule.
Rule engines enable lenders to manage and view all the rules within a single system. Interestingly, rule engines allow multiple usage of a single rule. For instance, after successfully testing a rule that conform the compliance of loan processing fees, it can be reused for other purposes such as conforming loan threshold.
In the current regulatory dynamic mortgage industry, a business rules engine can give a competitive edge to lenders as it allows rapid implementation time and better impact analysis.
Rule Engine Use Cases in Mortgage Loan Processing
An effective business rules engine is instrumental in running mortgage processes seamlessly and with more efficiency. On this note, here’s looking at the top 3 business rule engine use cases in mortgage loan processing.
Data Accuracy Validation
The chances of incorrect data entry are high when borrowers manually fill forms with their details. Inaccurate data entry has far-reaching impact on mortgage loan processing. It can result in releasing bad loans.
In another way, identifying a data error beforehand, requires backtracking and repeating an entire process. This results in significant delay in loan processing.
A business rules engine allows lenders to create forms. These forms allow borrowers to enter details in real-time. Such a capability is critical for lenders to validate information right at the moment when a form is filled. It eliminates chances of errors in paperwork.
Score Mortgage Events
Bad loans disbursal, fraudulent loan applications, among others are some of the unfortunate events that cost lenders money and a bad name.
Business rule engines can be programmed to allot scores to loans ready to be approved or loan file applications. Lenders can also set a criterion based on which the rule engine generates true or false outcome probability on certain events.
Based on these insights, lenders draw a definitive risk profiling of borrowers. Upon suspecting a fraudulent loan file application, a rule engine automates the workflow to notify the right department of lenders’ organization.
Strict Regulatory Compliance
Business rule engine is indispensable for the mortgage industry that is characterized by extremely dynamic regulations.
Based on the principles of mortgage automation, a rule engine allows lenders to automate regulation enforcing workflows. This helps lenders stay assured that all the regulations are adhered to in every transaction.
Lenders can also use business rule engines to manage internal policies across their organizations pertaining to logistics, pricing, discounting, among others.
Automated rule engines not only ensure compliance with mortgage-related regulations, but it also facilitate transparency in documentation. Such an ability is critical for lenders to justify their regulatory adherence during audits.
How MSuite Doubles up as an Effective Rule Engine
MSuite is a proprietary mortgage process automation tool that is intuitive and is easy to use. It is driven by sophisticated artificial intelligence, machine learning algorithms, and optical character recognition (OCR).
This tool has a modular structure. The rule engine module empowers MSuite to drive more efficiency in the mortgage loan origination process.
Here’s an overview of MSuite’s rule engine:
- Multiple rules can be run at a single time. It can be personalized based on lenders’ own business policies.
- It is easy to maintain MSuite’s rule engine module. This module automatically updates itself with the dynamic mortgage lending rules. Such a feature comes in handy for lenders during regulatory audits. It creates an audit trail which lenders can follow to justify their adherence to mortgage regulations during audits.
Why is MSuite Rule Engine Relevant for Your Mortgage Business?
There is no doubting the fact that the market is replete with several business rule engines with cutting edge features and functionality. But not all are aligned with the ground reality of the mortgage industry.
Such tools may have the best tech stack behind its making but at some point, it fails to cater to the hyperdynamic requirements of mortgage lenders.
This is when, MSuite’s business rule engine sets itself apart from the rest of the tools. MSuite was ideated, engineered, and maintained by our team of mortgage industry veterans. They have served over 100 clients with robust mortgage automation solutions. While serving, they have experienced and understood the kind of challenges you may witness in the foreseeable future.
Based on this understanding, every module of MSuite was built so that it effectively caters to your dynamic business requirements. Most importantly, MSuite easily blends into your legacy LOS. This exempts you from investing on additional infrastructure or make any significant changes in the existing system.
Who Are We and Why Are We Considered as An Industry Authority?
This article is authored by industry veterans at Expert Mortgage Assistance, a prominent mortgage process automation solutions provider. MSuite is our proprietary mortgage automation tool which we have successfully used to aid lenders process limitless loans within a month.
Get in touch with us to discover how MSuite can bring transformational changes in your current mortgage lending process.