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How Mortgage Lenders Can Automate Processes This 2023

Introduction

Lenders follow processes to ensure they issue mortgage loans to the right borrowers. They must accomplish a specific workflow every time a client seeks financing for a new home. But because of new technologies, customers expect banks and lenders to adopt processes that make lending faster and easier.

Here are five ways lenders can utilize to automate their processes:

Adopt CRM Software

All businesses need ways to retain clients to keep their business growing. Like any other industry, the mortgage industry must maintain a good relationship with past clients as much as they must acquire new ones. But in reality, mortgage officers likely don’t have time to keep in touch with their clients.

Fortunately, mortgage lenders can benefit from CRM software to help them maintain past and present client relationships. Most software has features that allow businesses to send messages to their clients.

You can look for the best CRM software according to your needs by reading mortgage CRM software reviews from business experts. For instance, you can send personalized birthday messages or remind clients they’re eligible for refinancing. You can also improve client segmentation by grouping them by client types, such as placing them into past or current contacts.

Utilize Appraisal Management Platforms

Managing an appraisal involves analyzing the value of the collateral. Typically, collateral is the property the law can award a lender if the borrower defaults on their loan. Most financial institutions consider this as protection for both parties because the loan amount must match the value of the collateral. In this instance, lenders can utilize data analytics to save resources and make little to no errors during collateral processing. 

Additionally, appraisal management systems make real estate appraisals, vendors, reviews, and other processes easier for lenders. An appraisal platform can help automate business decisions according to your workflow.

Lenders can integrate the platform with a loan origination system without adding costs for IT management. They also offer security with a choice of where to store your data.

        Save Time With Pre-Filing Data

        Mortgage application takes time and a chunk of the process you spend on client information verification. You must also check and save the information and make files of it for documentation later. Some automation software allows the user to analyze existing data to save time from manual data entry, improving speed and minimizing errors during an application.

        Third-party sources can also retain client information and help you verify location data from online maps. One example is when a client provides information for another product. The software saves the information and gives it automatically by pre-filling fields for the application.

        Make Signatures Electronic

        Many industries have started utilizing e-signatures, but lenders are yet to adapt the technology to their advantage. Many still require borrowers to come into the office to sign an agreement form to close the deal. But the problem is that clients are only sometimes available to drop by the workplace, thus, prolonging the loan process.

        In most cases, electronic signatures are legally binding and help eliminate procedure delays. E-signatures are the top trending digital products today for good reasons.

        Borrowers can experience convenience once electronic signatures become a part of the process, minimizing interruptions in the workflow. The lender can choose any e-signature software to provide an agreement copy to the client via the internet and use an electronically drawn signature on the contract or agreement. Nowadays, you can also find mobile apps for e-signatures.

        Avoid Fraud With Fraud Detection Systems

        In 2021, fraudulent applications rose to 37%, with at least 0.83% of mortgage applications containing fake information. Lenders have lost money to mortgage fraud, costing as much as USD$ 4.40 per dollar.

        Fraud-related financial losses can take a toll on a business. But with automated fraud detection systems, lenders can access client data and verify information on economic, property, and employer data. Automation software also can perform checks based on algorithms and detect tampering by reviewing documents quickly and separating ones that need human intervention.

        The best automation software allows human and technological solutions to work as one to flag tampering. For example, an automation brand can sense suspicious activity. Document fraud analysts and risk systems can gather the data they need to spot doubtful cases and make informed decisions to approve. 

        Robotic process automation (RPA) can also rule out false positives, such as when applicants perform transactions at odd times. The bots can investigate these anomalies independently, eliminating the need for human staff to do the task. 

        Conclusion 

        Mortgage businesses must keep up with other industries by using digital processes to help sustain their business, provide faster approvals, and keep themselves safe from fraud. Lenders can utilize many types of automation software, like CRM and fraud detection, to help them process mortgage applications faster and safer. They can help more people this way and retain past clients who might want to refinance someday.

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