How can automation and omnichannel experience help mortgage lenders in 2022

A quick run down on how automation can help lenders navigate a tough purchase market in 2022.

Sanat Mohanty

Product Marketing @Vaultedge

It’s been over two weeks since we wrapped up our visit to MBA Annual Convention & Expo 2021 and we can’t just stop talking about it. This is a tad bit evident in the fact that we are writing about it even after a fortnight of the event.

As exhibitors we were initially skeptical about low foot-fall due to COVID fears. However, to our surprise, the number of attendees was far greater than what we anticipated. There were about 3000+ attendees, 100+ exhibitors and some really kick-ass panel discussions that brought out key focus areas and themes for next year.

In a series of posts, we will give a quick rundown of top concerns that could be critical to lenders and servicers in 2022. If you want to read a summary of all the panel discussions - you can download the complete report here

Omni-channel experience for consumers:

Consumers want flexibility. They not only want a personalized digital experience similar to that on Amazon or Netflix, but also the option of doing things in good old offline mode. 

This means lenders and servicers need to analyze various customer interaction points & see how some of these could be made self-serve through the use of rule based forms, bots, explainer videos etc. At the same time - complex interactions like dispute resolution, grievance redressal etc could remain automated with human in the loop.

Another interesting point to note - contrary to general perception it is not just the millennials or Gen Z demographic that is driving the demand for digitization. It is rather spread across the entire demographic spectrum.

Rather, It has been observed that borrowers from lower income groups are more likely to apply for a loan if they can access some form of digital methods. This further strengthens the case for providing an omnichannel experience that goes beyond a digital-only interface.

Back-office efficiency to reduce cost per manufactured loan:

Given the fact that we are rolling largely in a highly competitive purchase market, there is a strong case to improve back-office efficiency and reduce the cost per manufactured loan. 

This means, just like our customers - our production and fulfillment teams also need an omni-channel support system to help them process and close loans in a better way. 

For example - Under Fannie Mae's Day 1 certainty module underwriters can save nearly 90 min per loan file. If you apply that to 100 files a week, lenders can process 30 more loan files everyday.

By compressing the time to manufacture loans - lenders can produce more volumes & hence drive more revenue.

Thus, integrating an AI / OCR based automation solution with human-in-the-loop, lenders can effectively save upto 60% time in loan processing and set up.

Streamlining loan QC and eliminating loan defect risks:

Tying back to the previous point, another imperative for lenders is to reduce loan defect risks and ship high quality loans. Loan production is a people intensive process which leads to risks of manual errors creeping into the loan files during - stare & compare analysis, data transfer and version controlling.

Implementing a document processing automation solution that sits between your POS and LOS helps avoid all the manual steps that go into validating the sanctity of the loan file data. Thus, lenders need to assess how automation based solutions provide a significant lift in the post close stage.

To summarize:

From the panel discussions at MBA Annual 21, we understood that implementing omnichannel systems that blend - automated self serve with human led interaction should be prioritized by lenders in 2022. This would help in ensuring a superior customer experience, improve back-office efficiency and eliminate policy compliance risks.

In the next post we will analyze what are some of the top concerns of servicing companies as discussed at MBA Annual 21.