Challenges Faced during Mortgage Processing

Loan processors can get overwhelmed with following up on different documents from multiple sources (including 3rd-party service providers) that are required to close a loan. They need to interact with loan officers, underwriters, borrowers and 3rd-party service providers to be able to fulfill conditions on a loan application before it is cleared for the final underwriter’s decision.

On an average, it takes a loan processor about 40 days to close a loan.

Tracking all this communication and responding to each one on time is tedious and time consuming. With their busy schedules, it is easy for loan processors to miss follow-ups, which causes further delays in closing loans. Longer closing cycles are always a reason to worry for lenders and brokers, as it directly affects both their top line and bottom line.

Ways to Promote Efficiency in Mortgage Processing Services

Eliminating some of the time consuming tasks that your processing team currently handles will make them more efficient and shorten the time to closing. Title binders, appraisals, HOIs and VOEs are some of the most time consuming tasks for a loan processor, and they require constant follow-up with 3rd parties. These tasks can be performed by a dedicated offshore team, letting your  processors focus on their core tasks.

Mortgage service providers offer dedicated teams that can take care of all the processing work that you currently handle in-house. Imagine a team working on your behalf—ordering, following up, receiving and reviewing title documentation, appraisal reports and HOI paperwork for all the loans you process. This would mean a reduction of about 30% of your processing team’s workload.

mortgage QC services

Supporting your processors with the help of a specialized mortgage service provider can help your firm achieve higher quality and faster turnaround. What’s more, letting a dedicated external team handle your tedious processing tasks also allows you to have tighter control in the event of new updates or changes in regulations.

Mortgage service providers get to work on their tasks immediately after a loan is ready to be processed. In most cases, they are able to sign off on title, appraisal, and HOI within a week, so that you can quickly move a loan to final underwriting. Their services can be handy right after origination, as they are capable of handling the entire loan process. They have resources trained and specialized in specific tasks (QC, Title, Appraisal, Income and Asset, Purchase Contract), hence you can expect better quality of work, while the offshore model gives you tremendous cost savings.

third party mortgage processing

Extreme volatility in economic conditions will continue to render lenders’ landscape extremely dynamic. This makes it imperative to align the entire mortgage processing workflow with technology that can aid lenders to address the modern-day lending problems. One of the key ways to do this is to adopt an enterprise-wide automation.

Paper-based and manual mortgage underwriting process should be phased out by automation to streamline data from different resources at any stage of loan origination to provide dataflow that is consistent and reliable. An automated underwriting system is enabled with workbench tools that drive the entire process. Features such as automatic warnings, task managers, logic and Service Level Agreement (SLA) tracking dashboards smoothen the process flow once it is entered into a pipeline with minimal to no manual intervention. This serves as a major boost to internal productivity.

Celent research findings states that automation results in a sharp decrease in the 18 days time period required in the underwriting process.

Usage of a cloud-based loan origination system is another key way to render mortgage processing services more efficient. A cloud-based LOS enables a proper identification of unqualified mortgage loan applicants as well as allows lenders to send borrowers quick pre-qualification results, information on pricing and status.

According to IDC Financial Insights, the worldwide financial services expenditure on mobility, cloud, big data and analytics touched a value of USD114 billion in 2015.

It is essential to keep the communication channel active with borrowers so that they are kept in the dark about their loan application status. It is imperative that lenders communicate on a definitive timeline that they have set to get the process done and the subsequent steps they are taking. This entitles lenders for their customers’ confidence throughout the entire mortgage processing workflow.