Creating Differentiation: How Intelligent Automation Can Help You Reimagine and Reengineer Mortgage Origination

February 22, 2021

As more fintech companies invest in the mortgage space, and with more IMBs going public seemingly every week, the technology landscape in mortgage lending – which typically lags other financial services industries – is changing rapidly and can be leveraged to create a significant competitive advantage. Innovative automation solutions currently in the market have been mostly concentrated on the front-end borrower experience. While this consumer-focused evolution will continue, the next technological transformation will be a total reengineering of the mortgage origination and back office processes, powered by intelligent automation. Investing in technology will become even more important as interest rates begin to increase, impacting volume, which in turn will result in lower margins and pressure on profitability.

Technology that leverages certain specific aspects of automation has been in the market for a while and undoubtably provides meaningful benefits. However, many technology products solve only one specific problem at a time, leaving companies trying to integrate and string together disparate spot solutions from different vendors. In addition, these technologies are often “black boxes” that provide the end-user with no control over changes or responsiveness. Without understanding origination and mortgage operations, many of these solutions will not be able to increase and sustain efficiencies, reduce costs, or enable operations to scale up or down with volume.

Due to these limitations and challenges, many companies are turning to true intelligent automation solutions that leverage Robotic Process Automation (RPA), Artificial Intelligence (AI), Optical Character Recognition (OCR), and deep Machine Learning (ML) to eliminate repetitive, manual processes and create a much more efficient and scalable loan manufacturing process. Using this technology, companies can target the highest-ROI areas within their operation and layer in additional automation over time, driving significant improvements in efficiency and profitability as they go. With the right intelligent automation approach, originators can attract top talent by closing loans faster, scale without hiring and laying off employees, reduce costs to originate and increase profitability.

Intelligent automation is designed to:

  • Extract relevant data from varied external and internal document locations from any source and recognizing, categorizing and indexing source documents.
  • Perform comparative document analysis and ensure guideline adherence, while executing complex rules and calculations.
  • Automate manual, repetitive tasks, reducing time spent entering data and reducing input errors.
  • Improve staff productivity and liberate them to work on more meaningful/productive tasks; do more with same/fewer FTEs, scaling up or down with volume demands, without hiring additional staff.

At a time when companies are hyper-focused on closing loans as quickly and efficiently as possible while future-proofing their businesses against lower volumes and margin compression, the need to leverage technology, including intelligent automation, has never been more important. Technology – and how it is leveraged – will determine who wins in the future.

Seth Cohen

Director of Business Development, Richey May
About the Author

Seth Cohen joined Richey May in May of 2016 as Director of Business Development for the firm’s mortgage banking practice. His primary role includes identifying and establishing new client relationships with companies who would benefit from the firm’s mortgage industry specializations and value-added services, including audit and tax services, as well as a wide range of advisory services that help clients mitigate risk and promote long-term success.

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