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The COVID-19 pandemic has caused waves of uncertainty in the economy throughout the world. Businesses are finding it hard to remain open and employment opportunities have become hard to come by. People are facing financial hardships and it has hence become difficult for the average person to avail basic amenities while keeping up with their regular mortgage payments. At the same time, many are also considering the option of refinancing their existing mortgages. In the middle of all this, the mortgage industry is struggling to meet the needs of borrowers. The circle of lending and borrowing has always kept the economy running and that is why there are high expectations from the mortgage industry even during this difficult time.

One of the ways how the economy can be pulled back to where it was prior to the pandemic is by refinancing. Mortgage refinancing is likely to become the option that many individuals will be opting for in these times of decreasing income and increasing home equity. Hence, the services of external loan processing companies would be more important than ever for lenders in the coming days.

Some scenarios in which the corona virus pandemic has impacted the mortgage refinancing process

The process of mortgaging a property or an asset involves several checklists full of items and it needs an eye to detail to realize the best outcomes. As the coronavirus pandemic has disrupted the workflow of the mortgage industry, the whole checklist of mortgage loan processing has also been impacted in more ways than one. Lenders, borrowers, and mortgage processing companies are all in a quagmire of a situation. Among the numerous distinct mortgage processes impacted by the ongoing pandemic, below is a list of the worst-hit ones.

Title Searches

For a successful real estate mortgage transaction, clarity about the title is a necessity. To execute the task efficiently, the mortgage lender must peruse the public records to trace the legal ownership of the property. Going through these records makes it evident if there are any competing liens on the property. Owing to the pandemic induced lockdown, this kind of information has become hard to access for the lenders. In the absence of electronic records, filing of a new mortgage on such unclear titles creates a significant delay in the closures.

Solution to consider

A possible solution to this problem would be to digitize title insurance policy details. When a refinance application is received, the details can be easily extracted from the prior policy docket. Going over bulky electronic records is one of the chief services that mortgage processing companies offer. And this substantially reduces the gap phase between filing and processing of property-related mortgages.

Data Verification and Application Processing

There are multiple steps in the mortgage refinance verification process and one among them is the verification of the employment records of the borrower through verbal communication. In the current times, verbal verification of details is difficult as meeting people in person is being avoided. Traveling around to verify data is also not preferred. Also, verifying the continuity of income is another important factor that lenders must assess prior to processing mortgages. The chances of borrowers failing to repay the loan because of the impact of Covid-19 has increased. It has, therefore, become important for the lenders to assess such a scenario to screen out defaulters.

Solution to Consider

Owing to the ongoing difficulties, the current practice is to accept emails from employers with identity details of the verifier and the borrower. This is another aspect in which the mortgage industry is suddenly having to do a lot of work through the digital and virtual spaces. Spending hours verifying data online, locating and connecting with individuals, and following up countless times can be reiterative and redundant labor. This is when smart lenders opt to outsource mortgage loan processing to let industry experts handle such repetitive works. For lenders that had not considered this earlier, the ongoing situation has given them a chance to rethink their options. It is understood now that contract mortgage processing companies are an essential part of the lender’s businesses.

Property Appraisals

The conventional way of getting a property appraised of course included a site visit. However, in the current situation, appraisers are not keen on visiting homes; nor are borrowers comfortable with letting in a flurry of appraisers into their properties. This double-edged problem has caused mortgage lenders to reinvent their policies. Some have opted to waive off property appraisals altogether while others are doing an exterior appraisal alone. Either way, the assessment of the property remains incomplete to some extent.

Solution to consider

The above problem can be tackled with additional evaluation categories by tweaking the policy details as per regulations. Thus, understanding the unconventional regulations has suddenly become a necessity that lenders must meet. It is an additional requirement that lenders have to accommodate in their already long processing structure. These are scenarios that external mortgage processing service providers are well-equipped for.

Since the outsourcing partner boasts of a task-force that is proficient in understanding and translating regulations to fit the needs of different mortgage cases, contract mortgage processing is the best option for lenders.

Outsourcing is the Best Way out of the Current Crisis for the Mortgage Industry

s elucidated in the examples given above, the mortgage lender community is facing a whole lot of unique challenges in the processing of fresh mortgages and refinances. The solution to most of these challenges is enlisting a competent third party mortgage loan processing company for their services. Besides the points stated above, here’s a list of a few more compelling reasons why outsourcing mortgage loan processing is beneficial to lenders.

Increasing capacity for work

Loan and mortgage processing service providershave a repertoire of skilled employees who can greatly increase the productivity associated with mortgage processing. Their years of experience in the industry makes them best suited for assisting lenders. The workload on lenders has increased substantially because of the pandemic and there are heaps of information that need to be verified and validated. There is also a lot of time spent on making follow-up calls for every mortgage application. It can become too much to handle for mortgage lenders with limited resources and employees. All of this can be easily handled by a trustworthy mortgage processing company with suitable infrastructure and relevant experience.

Since reliable mortgage processing service firms can deal with multiple cases simultaneously, several mortgage applications can move ahead parallelly without any case falling behind. This level of multitasking can only be expected from the expertise that several years of experience in the business can bring. Professional mortgage processing companies in USA are well-suited to provide quality collaboration in such cases. Increasing productivity is very much desirable at this time, mainly because any laxity at this time would mean losing crucial business.

Digital Taskforce

The pandemic has mandated most operations to be done remotely but working from home has brought several interruptions to the workflow. However, professional mortgage processing companies have been in this game longer than most other businesses and have perfected the art of working remotely. The client doesn’t have to invest in setting up a work-station at home that can give them the same infrastructural and digital leverage a corporate environment does.

That is something that contract mortgage processing companies are already offering with their established systems. Instead of investing in an entirely new set-up, it is wiser for the client to invest in procuring the services of the well-oiled machine that external mortgage processing companies are. A digital taskforce will remain relevant even after the work-from-home mandates are lifted. This implies that the significant cost benefits that hiring contract mortgage processing companies brings can be realized even in the future.

Processing and Analytics

For the mortgage industry to improve process efficiency, an analytical understanding of the daily operations is important, and this can be realized through mortgage processing service tools. Understanding the process will give lenders an overview of where they are likely to face losses and how to avoid them. More importantly, an analytics-based approach makes it possible to visualize data in clear terms and get smart recommendations.

Decision-making becomes easier when numbers and figures clearly illustrate where lenders can expect consistent and timely payments. Credit risk profiling using the analytics supplied by mortgage processing service partners has made it easier for lenders to assess the credit-worthiness of prospective borrowers and make informed decisions. Smart use of data is also critical for scaling operations, identifying trends, and exploring actionable insights to ensure the long-term success of mortgage businesses. But since harnessing large volumes of business data requires specialized technical resources, the services of an external mortgage processing company can be of great help.

Technological Advantages

The challenges that the mortgage industry is facing due to the pandemic are not interim issues. These lacunas have existed in the system for a long time and the pandemic has only made them more visible. These rapidly increasing problems have rapid solutions in the technological sphere. It is now known that mortgage processing service providers have been investing in automation and technology for a long time now. This foresight has given them a technological niche to keep operations running while most other businesses have shut down.

The need to incorporate technologically well-adapted practices into the lender’s workflows is more pronounced than ever before. Data capture, flow, and storage are all made smoother when software and algorithms take the wheel. With technologies such as Automation, Artificial Intelligence, Analytics, and the like, it’s now easy for lenders to identify process bottlenecks and eliminate them to realize higher efficiency while saving on operating costs.

The Severity of the Impact Varies

The impact of the pandemic on the process of mortgage refinancing varies from lender to lender. Depending on the scope and size of the lenders, the difficulties that they are experiencing vary. Some lenders are well-equipped to work in such challenging environments, but most will not have the foresight. The services of third-party mortgage loan processing companies will thus be of key interest for lenders, the small and mid-sized ones, in particular. To understand what kind of assistance they require, a complete analysis of the lender’s businesses must be done. Only then will lenders come to know in what ways they can employ the benefits that loan processing companies can bring to their business.

The coronavirus pandemic has put environmental stress on the world. But even during such times, businesses can still survive and thrive by embracing better practices in their ecosystem. The efforts of the mortgage industry towards digitization and the consolidated technologies of the outsourcing service firms can together help in this evolutionary process. The solutions offered by mortgage processing companies in USA can easily be incorporated by lenders into their workflows. And this alone should be enough to convince the mortgage industry to make contract mortgage processing companies their allies in operations.

With a competent mortgage firm by their side, lenders can efficiently tighten their line of credit and expect safer returns on mortgage payments. There is an urgent need for the mortgage market to learn new lessons in operating efficiently. The volatility of the market has made it even more critical for lenders to leverage the expertise of mortgage processing service providers for all their future endeavors.

Who We Are And Why You Should Trust Our Expertise?

Expert Mortgage Assistance brings to you a full set of expert mortgage servicing solutions. With over 10 years of experience in the industry, our seasoned team is ready and willing to help mortgage lenders with their daily operations. We are equipped with an array of digital tools that make the handling of arduous and repetitive mortgage verification tasks easy. Our expertise enables us to help lenders tackle the problems they are currently facing, and also prepare them for the oncoming challenges in the future.