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How Does Mortgage Automation Software Help in Saving Underwriting Costs?

Written by Jimmy Rustling

Mortgage automation software comprises a wide variety of programmed packages that integrate into the existing computing systems of a lender. Each one of these software suites is designed to perform a specific function with a specific approach. From Robotic Process Automation (RPA) to advanced systems like Artificial Intelligence (AI), automation is set to transform the mortgage industry for the better.

The standard mortgage loan approval process is exhaustive and resource-intensive. The main contributor to the complex nature of the mortgage business is federal regulations and the need for a wide variety of documentation. Every document that a lender collects from a loan borrower is of utmost importance. Each one of these documents is meticulously examined during mortgage underwriting process to ensure complete accuracy. Documented proofs received by a lender can help protect their business interest especially if a conflict arises with the borrower. This is the primary reason behind the depth and meticulous nature of mortgage underwriting.

Here’s How Mortgage Automation Saves the Day for Underwriters

We have heard time and again how automation is positively impacting the mortgage business. To know exactly why it is important to know what part of the business and how these modern-day technologies are introducing a change in underwriting.

Mortgage automation is achieved by deploying tools that are tailor-made for specific tasks of a lender’s business model. For a high risk task such as underwriting, automation technology such as RPA can help boost the efficiency of the process exponentially.

Using RPA, mortgage lenders can improve the quality of borrower data that is dispatched to the underwriter for approval. This reduces all instances of delays resulting from missing information in a borrower’s loan file.

The following are the important areas where automation is helping lenders save underwriting costs:

Paperless Loan Processing: Underwriters are always happy when they spend as little effort as possible to go through loan files. This is possible only when they have digital versions of documents with them. Thanks to techniques such as electronic closing, submission portals, electronic signatures and more, lenders have managed to reduce a significant amount of costs involved in mortgage underwriting and at the same time enhancing efficiency.

Document Digitization: Bringing borrowers’ details aboard a repository powered by a computer system is necessary to be able to work with the data. This process is called digitization. Given how much documentation is involved in a standard loan approval process, this is the main area where mortgage lenders can look to make some serious savings in costs. It also streamlines mortgage underwriting, the most important step of the process by enabling loan processors to dispatch loan files electronically, to the underwriter. Using tools that can automatically ‘read’ borrower documents such as income statements to maintain them in a repository saves lenders the costs involved in hiring additional resources to scrutinize docs.

Accuracy of Data: The accuracy of borrower information is paramount for a lender. The smallest of niggles in data entry can lead to the lender approving a mortgage loan for a high-risk candidate with an unstable income source. Automated data entry, validation, and assessment are possible today, through mortgage automation software. By eliminating the effort required to correct wrong information, lenders can help underwriters save significant time as well as stay clear from legal matters. This directly translates into cost savings.

Mortgage automation software suites are set to become a necessity not just for speed but also for its immense contribution in helping lenders save on costs.

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About the author

Jimmy Rustling

Born at an early age, Jimmy Rustling has found solace and comfort knowing that his humble actions have made this multiverse a better place for every man, woman and child ever known to exist. Dr. Jimmy Rustling has won many awards for excellence in writing including fourteen Peabody awards and a handful of Pulitzer Prizes. When Jimmies are not being Rustled the kind Dr. enjoys being an amazing husband to his beautiful, soulmate; Anastasia, a Russian mail order bride of almost 2 months. Dr. Rustling also spends 12-15 hours each day teaching their adopted 8-year-old Syrian refugee daughter how to read and write.