mortgage process outsourcing

How to Choose a Partner for Outsourcing Mortgage Processing Requirements?

mortgage process Jun 05, 2020

Outsourcing in general has become essential for businesses as mortgage processing is a task that requires meticulous effort and substantial time to complete. This is why mortgage consulting and mortgage processing outsourcing services have attracted widespread demand across the world. Outsourcing helps banks and other lending institutions better manage surges in loan requests, lower their cost per loan, and keep their loyal customer base happy. It also helps lenders reduce their workload when it comes to time-consuming, high-volume tasks that fall under accounting, loan processing, underwriting, title ordering, post-closing, or appraising properties.


There are literally hundreds of factors to consider when you go looking to partner with an outsourcing mortgage processing company. However, we have compiled a list of the 7 most critical factors that you ought to look into instead to keep the process very simple and straightforward.

Primary Factors to Consider When Choosing an Outsourced Mortgage Processing Partner

  1. Experience: A Measure of Domain Knowledge Acquired

It is critical that you start assessing mortgage process outsourcing partners by the number of years of experience they have in their field of expertise. The greater the number of years of experience in the business, the greater the likelihood that they have gained in-depth domain knowledge and have a solid grasp of industry best practices. Having deep domain knowledge and a good grasp of industry best practices means that they know how to run mortgage processing services in such a way that keeps revenues flowing and ensures clients remain profitable.


A highly experienced third-party loan processing partner will have tried and proven methodologies, tools, processes, and resources in place to ensure mortgage loan process optimization. This will ensure that all their processes have been tested for efficiency and that they have the expertise required to pull off successful mortgage processing.


The partner’s personnel must also have in-depth knowledge of shifting regulations, upcoming UCD mandates, and newer compliance requirements. Being well-read on any changes in regulatory frameworks that will impact their business is also a good indication that they take themselves seriously as industry experts and service providers.

  1. Technology & Processes: A Measure of Process Efficiency

Any loan processing outsourcing partner worth their salt will have the most sophisticated technologies at their disposal as without them they cannot compete effectively in the cut-throat mortgage industry. Some of the different mortgage processing areas that require the latest technologies include assessing risks, identifying anomalies, predicting loan performance, answering customer queries, and improving accuracy in loan documents. To this end, outsourcing mortgage loan processing partners have started investing in machine learning and data analytics applications to help in streamlining the underwriting process and aiding QC auditing.


As mortgage lenders increasingly turn to artificial intelligence applications to help accelerate and improve mortgage processing, a world-class mortgage processing outsourcing partner will have these technologies at the ready. Worthwhile partners will take full advantage of big data and drive analytics-based decisions for underwriting loans, conducting post-closing audits, and establishing pricing models. This will, in turn, result in a substantial increase in customer satisfaction and profits.


Implementing Robotic Process Automation (RPA) is also key to streamlining mortgage processing as it can execute routine, rules-based tasks without human intervention, thus making the process more efficient. It is well-suited to automating the resolution of exceptions and clearing any bottlenecks that constantly hinder mortgage origination.

  1. Talent Base: A Measure of Skills that You Can Command

Although much of the manual work in mortgage processing is being replaced by automation, there is still significant room for human intervention throughout the mortgage loan lifecycle. The human resources involved in the process should be highly trained across all processes as the laws vary in the US between states. The success that you can expect to experience will depend directly on the quality of these resources. That is why you should carefully evaluate the team that will be responsible for working on your project.

The diverse talent pool available should be qualified to meet the necessary requirements and be highly trained and certified in handling complex mortgage tasks. While they will be aided by cutting-edge technologies and automation wherever possible, they will need to have the skills and knowledge to properly exercise judgement in high pressure situations. Moreover, they will need to know the entire loan lifecycle inside out to ensure that each mortgage is successfully dealt with and processed with due diligence.

The loan processing outsourcing partner should also be able to offer scalable support that can be adjusted depending on whether you are in a peak or dull loan season. This is important because one of the most important benefits of outsourcing is to gain from flexible staffing so that your costs are not fixed in stone. Outsourcing means that you can onboard more staff to handle increased business volumes during peak seasons and not have to pay them during off seasons as they are not permanent hires for your firm. This is especially useful as this lowers your fixed operational costs and allows you to keep only the best resources that perform their functions well. Always assess the talent base you will be relying on so that you have a good idea of what level of quality you can expect from them over the course of your project.

  1. Mortgage Compliance: A Measure of Federal Requirement Knowledge

Compliance is a huge undertaking when it comes to mortgage processing requirements. Complying with continuously changing and numerous lending regulations takes significant and sustained efforts from the lender’s part. Compliance is important for three reasons. It helps you obey the laws that protect borrower’s rights and you can also avoid getting audited and fined by regulatory bodies for suspicious practices. Finally, you can ensure that all the mortgage loans you fund can be resold on the secondary market to investors so that profits can continue to be made. Without compliance requirements, borrowers, lenders, and regulatory bodies would not know what is going on and which loans to trust.

The right partner to help you outsource loan processing services will be on top of compliance requirements like it was the most important piece of in the mortgage processing puzzle. With the implementation of the new Dodd-Frank act, the loan origination process has become more complex and lot more time-consuming.

Mortgage processing outsourcing partners with experience in loan origination can help you streamline the process with well-trained resources that conduct these processes with accuracy, efficiency, and within the regulatory requirements. The challenges of achieving compliance, maintaining compliance standards, and demonstrating that compliance is in fact in effect does not need to conflict with running a profitable lending business. Matter of fact, the right partner will have the highest configurations, decision rules, and workflows in place to help the entire system maintain compliance from mortgage origination till post-closing quality control.

  1. Quality Standards: A Measure of Competency

When looking for the best mortgage loan processing support outsourcing partner it is important that you keep quality control top of mind. Sometimes outsourcing partners are guilty of providing you with greater affordability or flexibility at the expense of compromising the quality of work that is delivered. A well-established partner will be able to reduce costs by controlling turnaround times and other expenses, rather than let quality take a hit. This is because a good mortgage loan process outsourcing partner knows that their entire business depends on giving their clients high-quality mortgage loans. It is only if the mortgage loan that is processed is of high-quality that it can be sold in the secondary market to investors.

A mortgage loan that is funded is of high quality if it has 98% accuracy or above in indexing and loan setup and has benefitted from comprehensive reviews and asset verification during pre-underwriting. It is also of a higher quality if it has been through a pre-funding QC audit and is found conforming to mandatory GSE guidelines through sample audits of closed loans from collateral, credit, and compliance perspectives. Fraud reviews that authenticate documents, detect early payment defaults, and review red flags to cut down on bad loans are also important to ensuring high quality loans are generated. Conducting pre-purchase reviews of closing packages to dramatically improve turnaround time and accuracy are also essential to this process.

Having access to the right AI or machine learning-based technologies can help in the auto-indexing of loan documents and generate higher quality mortgages. Finally, having a trailing document follow-up service to help you manage document queues will result in fewer penalties when it comes to your secondary market operations. By reviewing the numerous processes and quality control measures the outsourcing partner has in place already, you can make an accurate assessment of how well they meet industry quality standards.

Secondary Factors to Consider When Choosing an Outsourced Mortgage Processing Partner

Outsourced Mortgage Processing Partner

  1. Costs: Turn Savings into Profits

It is a well-known fact that outsourcing mortgage loan processing services to a partner can cut your costs by as much as 78% in some cases, which is partially why it is so sought after. Not only is this due to the fact that the personnel you onboard are from less developed nations, but the outsourcing partner often operates from third-world countries that do not face as high living costs as other more developed nations.


Just because the mortgage loan process is based out of lesser developed countries does not mean that the quality of services they provide is low as well. Some offshore partners are running out of countries that are exceptionally well-endowed when it comes to technological capabilities and a well-educated workforce like India and the Philippines.


This means that they can reproduce the same services as more developed nations but incur less operating costs because of the standard of living involved at their home base. This cost difference across national borders and the kind of technological expertise they have is part of the reason why so many mortgage processing companies are outsourcing their requirements to offshore establishments.


When picking your mortgage processing partner, however, it is important to note that cost should not be the main reason why you select a certain service provider. The most cost-effective outsourced mortgage processing partner may not necessarily be the one who provides the highest quality loans, which is a huge trade-off. It is critical that you allow the costs involved to influence your decision, but also recognize that costs are just a secondary factor in the selection equation, not a primary objective.

  1. Client Portfolio: To Know the Truth

You can often tell a lot about an outsourced mortgage processing partner by the type of clientele they predominantly deal with. If most of their clients are local and small to mid-sized, it is safe to say that they do not have great experience dealing with processing thousands of loans on a regular basis.


They may also lack the technology and infrastructure to handle such large workloads because they have only had to service smaller players in the market. It is important that you request to see their client portfolio so as to get a clearer indication of what type of service quality and workload capacity you can expect to receive yourself. If you are a mid-sized or larger player in the mortgage industry, you must shop until you find an outsourcing partner that has resources and infrastructure in place to meet your needs. Moreover, they must have years of expertise in handling business volumes like yours and have streamlined workflows in place to ensure that mortgages are processed efficiently and with enough speed.

If Fortune 500 companies make up a significant part of their client portfolio, you can rest assured that they have vast experience dealing with high pressure situations and large business volumes. Also, if more than half their clients have been with them for 5 years or longer, it is safe to say that they stuck around for a reason. Long term partnerships are what you should be looking for as well when trying to find a mortgage processing outsourced partner. Finally, if they are able to handle more than a few thousand mortgage loans annually and operate from multiple global delivery centers, they have the resources in place to provide high quality services to meet your business requirements at any time of the day or night. Ensuring that their clientele are on the same level as you will help you pick a partner that will respect your expectations and requirements and establish that they have the required experience already to excel in that field.

When lenders have to go looking for highly qualified mortgage processing outsourcing partners, there are a list of factors that they should look at before deciding on the right one. These can range from primary factors like quality standards, compliance, talent base, technology, and experience to secondary factors like cost and clientele. What you are trying to establish is whether the outsourcing partner can process your business volumes and provide you with high-quality services without compromising on compliance to keep costs low.


Because cost is a secondary factor to consider, you must always look at compliance and their level of expertise before you settle for the most affordable option. Look at the 7 most critical factors that we have outlined before you decide on a mortgage processing outsourcing partner to partner with going forward.

 Who We Are and Why Our Opinion Matters?

This article is brought to you by Expert Mortgage Assistance, an industry-leading end-to-end mortgage loan servicing solutions provider with heavy expertise in prime residential and commercial mortgage markets. With over a decade of experience in the US mortgage industry, we understand the importance of high-quality mortgage originations and closings. We also understand the intricacies involved in mortgage processing and ensure that all critical processes are handled with extreme vigilance. In this way, we only deliver high-grade mortgage processing solutions to our clients to keep them forging ahead and growing their business operations at all times.

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