The Rising Importance of Automation and Technology for Mortgage Lenders

1. The Rising Importance of Automation and Technology for Mortgage Lenders Mortgage rates have hit their lowest point in more than three years. This time though, they aren’t setting the stage for a highly competitive homebuying season. In fact, a massive shutdown of the economy has caused homeowners and potential homebuyers to back away from the mortgage market. As per recent figures from the Mortgage Bankers Association’s (MBA) seasonally adjusted index, total mortgage application volume fell by 29.4% as compared to the previous week. MBA experts say that “homebuyers might continue to hold off on buying until there is a slowdown in the spread of the coronavirus and more clarity on the economic outlook.” A lot of businesses – Working from Home This is also a time when in most organizations, including BFSIs, employees are working from home. It has meant that productivity has taken a hit to some extent considering the infrastructure in office space may not be easy to replicate at home. For mortgage lenders, the situation is tricky since there has been record refinancing demand, time-consuming credit checks and several queries about workouts for existing loans that could be in jeopardy. There has also been a deluge of calls from panicking customers asking for forbearance on their current loans. Role of Technology in streamlining processes At a time like this, tech-savvy organizations have been able to streamline processes. Robust technologies have ensured that their employees are

2. working remotely with no disruption in service to clients. Lenders who have embraced automation solutions like Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), Chatbots, etc. are handling the situation with minimized disruption to their operations. The automation savvy lenders have managed to deal with the human factor risk, better match the customer experience and thus minimize the risk of losing customers. They are in a significantly better position than organizations who are largely dependent on traditional manual processes. According to Fannie Mae, about 27% of all mortgage lenders are already using some form of AI or ML to assist with mortgage origination. Companies are emphasizing their pre-existing technology capabilities as one of the main reasons they are able to embrace a remote working scenario. The latest AI and ML systems, together with cloud technologies have transformed the global mortgage industry, bringing innovations and offering fundamental change for both lenders and borrowers. AI and ML can be applied right from origination, acquisition to post-close and servicing decisions. AI has benefitted real estate industry participants in many ways. Communication between buyers and sellers has been augmented with AI resulting in faster response to clients, without increasing spending. AI-powered RPA has helped lenders solve specific loan processing problems and increase productivity by as much as 20%. Such technologies are proving to be powerful forces by helping improve on loan processing time, quality, compliance and cost. RPA has plugged the gaps created by fragmented systems without incurring huge integration costs. ML too is progressively being used to help mortgage lenders become more efficient, profitable and capable of delivering a better customer experience. It is assisting lenders in classifying documents and assessing data accuracy, so they can process loans faster. Summary: Automation solutions like AI and ML implementation are helping focus on strategic, value-added activities to provide better customer experience. It’s time more and more mortgage lenders harness technology to accelerate responsiveness and protect both the lender and the borrower at a time when it’s needed the most. Visionet provides loan processing solutions that leverage AI/ML-based technology to significantly speed up loan processing. Contact us today