How Mortgage Loan Automation Kills 2 Birds With 1 Stone

Summary

Interest rates are at an all time low, creating a high demand for purchases and refis.
Many loan originators still depend on outdated, manual, and paper-based processes.
Although interest rates and fees are important, borrowers are looking for digital mortgage experience that provides improved communication, transparency, and proper expectations.
Loan originators are incorporating mortgage loan automation tools to keep their customers happy and grow their business by making the loan approval process faster, more accurate, transparent, and more efficient

Mortgage brokers are faced with a double edged sword. On one hand, business is booming. The current pandemic forced interest rates to an all time low, flooding the housing market with renters looking to buy and existing homeowners to refinance. On the other hand, many loan originators and processors still depend on time-consuming, error-prone, paper-based and inefficient processes which prevent them from focusing on their clients and growing their business.

The outdated and manual loan processes also create a lot of friction for the customers, for whom applying for a home loan becomes a stressful and emotional journey. For borrowers, taking out a mortgage is THE biggest monetary transaction of their life, and it’s also the most frustrating and lengthy financial transaction they endure.

While interest rates and fees are extremely important when choosing a lender, these factors are more or less the same across different lending institutions. When looking for a loan, price is not king. What borrowers really value (especially first time borrowers) is exceptional customer experience, reputation, and knowledgeable staff. In the mortgage industry, reputation can make or break a loan originator. Customers that had a negative experience will not recommend the lender to others and are 2-5 times as likely to work with someone else to refinance.

Customer expectations, catapulted by the Covid-19 pandemic, have changed. 91% of lending institutions agree that customers are looking for a digital mortgage experience. Borrowers don’t want to send (and re-send) a never-ending trail of paperwork, and then get flooded by calls and emails for missing info and documents.

Savvy loan originators understand that in order to close their loans faster, make their customers happy, and free up time to look for new clients, they have to move away from ancient and manual processes and move towards automation technology. They must transition from working hard to a working smarter mentality.

Loan automation is a solution that kills two birds with one stone by eliminating pain points and challenges for loan originators AND customers. Approximately 60-70% of tasks in the lifecycle of a mortgage can be automated. And today, there are many mortgage fintech solutions that fill partial or majority of automation needs that provide countless benefits for their business and customers without sacrificing quality.

Shorter Closing Times

Loan application process, especially during Covid times, can take up to 90 days, involve more than 500 pages of documentation, 10+ transactions per day, and manual data re-entry. Automation can shorten the loan processing cycle by up to 50% by eliminating repetitive tasks and errors.

Less Errors

Manual data entry has a high propensity for errors which can slow down the closing process and even lead to loan rejection. Human error can cause up to 10% of discrepancy while doing redundant work. This creates extra work for the loan originator and unnecessary frustration and stress for the customer. Automation can improve loan quality by eliminating human error.

Increased Productivity

Automation helps employees cut down on manual and repetitive tasks, close loans faster, and free up time to focus on growing their business.

Pipeline Management

Automating the mortgage process allows for lenders to have process uniformity, realistic closing times, and accurately predict their revenue. This information can also help lenders adapt to market fluctuations and customers needs.

Defined Workflow

Each loan is unique and requires a different “mix and match” team and customized process. Mortgage automation tools allow to create processes for different loans and create workflows for closing teams where everybody has a clear understanding of their deliverables and timelines.

Communication

Loan originators can spend up to 75% of their day calling and emailing customers about missing info and paperwork. Automation allows lending teams to send and request information digitally and resolve issues faster. Automated digital notifications can reduce time, manual work, cost of printing and mailing and allows lenders to keep records for regulatory compliance purposes.

Scalability

In today’s volatile market, for a business to grow, loan originators must adapt to real-time industry changes and customer needs. By automating the mortgage process and decreasing the closing times, lenders can take on more clients, adapt to market changes and respond to spikes in demand.

Happy Customers

Dependence on technology and digital tools has created a culture that wants results and answers instantly. Customers don’t want to chase lenders for updates and wait for weeks for a loan decision. Mortgage automation makes loan processing faster, efficient and transparent, allowing lenders to set realistic expectations. Because automation cuts down on manual and repetitive tasks, it gives originators more time to focus on customer service and stay connected with the borrowers.

Benefits of mortgage automation for loan originators and borrowers are endless. RealKey is an innovative mortgage automation solution that can help lenders run and grow their business efficiently while providing customers with the best experience. Contact us today for a demo and learn how RealKey can help you scale your business.