Traditional mortgage lending is a complicated, time-intensive, and paper-heavy process. At a time when consumers expect faster and more streamlined digital lending experiences, traditional processes may no longer cut it. In recent times, many lenders have started the process of automating the loan processing system. Loan processing system automation benefits both lenders and consumers by modernizing the loan process.
A modern automated loan processing system has distinct advantages over legacy lending systems. Using the latest cloud and web technologies, it is quickly implemented, configurable, provides a superior customer experience, improves decisioning accuracy, and eliminates paper documents. Automated systems accelerate all stages of the loan cycle. Automated loan processing gives lenders the ability to quickly evaluate and identify applications that meet your lending criteria, underwrite confidently, notify the borrower, and fund the loan.
Benefits of Loan Processing System Automation
Loan Processing System Automation facilitates the mortgage industry in several ways. By setting up compliance practices and governance policies, the realized benefits can be provided to the customers. Following are some potential benefits of automation in loan processing system
- Enhanced Productivity
Due to manual processing, employees lose their productivity. Once the mortgage processes are automated the productivity of employees increase. This enables employees to process mortgage applications instantly.
- Improved Accuracy
- In manual loan processing, the factor of human error is ever-present and mistakes made during mortgage processing are not easily identifiable and consume a lot of time to correct. Automated mortgage processes have the ability to produce error-free work in less time.
- This also improves the accuracy of the work.
- Improved Customer Experience
Loan processing goes through a series of extensive steps including buyer availability, the workload on employees, processing and approvals, etc.
- Loan processing system can integrate its functions with cloud infrastructure and work continuously with no need for a brake.
- The system ensures 24/7 processing of mortgage which ultimately leads to improved customer experience and satisfaction.
- Hyper automation incorporates predictable processes; around the closing date of the mortgage, the borrowers can fit into other plans. Hence, increasing the chances of timely and smooth closing along with customer satisfaction as well.
- Easier Auditing
- With loan processing system automation, its leading processes, and documentation, the ability of the system to respond immediately to the risk can be increased, so that they can be mitigated on time for more cohesive and better compliance guidelines.
- Loan processing system automation will ensure that the audit process is completed on time without any hassle.
- In loan process system automation obligation of financial regulations are also taken into account and management does not need to worry about the fact that whether during mortgage processing, employees are following regulations or not.
- Enhanced Scalability
- Scalability is the potential factor that facilitates the mortgage industry to embrace machine-based automation.
- Loan processing system automation helps the employees in understanding various kinds of formats used in mortgage documents, for data extraction, document stacking, data analysis and better classification. This further reduces processing time and facilitates the lenders to quickly respond to spikes in demand.
- The adoption of loan processing system automation can provide an opportunity for the lenders to achieve long-term customer-centric goals along with increasing the overall productivity of the firm.
- Predictable Revenue
- One of the main reasons for how automation will transform the mortgage process lies in a very simple fact – that lenders will now be able to predict their revenue.
- With the help of loan process automation, you can easily predict the revenue your leads will fetch, and the loan process will yield over a period of time as part of your entire loan cycle.
- This knowledge will, in turn, ensure lenders can adjust better to fluctuating customer demands while sticking to the new government regulations.
As a mortgage lender, you can build complete audit and control checkpoints within your processes, as their upfront design can ensure their capability of providing better data gathering, pre-population of transcripts, etc. based upon the existing regulations.
There are software’s available to automate loan processing system. Ellie Mae offers Encompass Loan Origination System (LOS) to originate more loans, lower costs, reduce time to close, and make smarter business decisions.
Please refer “LOAN MANAGEMENT SOFTWARE TO AUTOMATE YOUR LENDING PROCESS”.
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Take Five Consulting is a technology company, based in Virginia U.S., that specializes in the Mortgage Banking vertical especially LOS implementation and application development. Take Five Consulting creates and implement mortgage technology and software specifically for Mortgage Industry.