Sector benefited from pandemic-imposed restrictions – now it's time to take it to the next level
The COVID pandemic in 2020 proved to be a turning point for the mortgage industry.
Up until then, originating and processing a loan took more than 25 people, 100s of manual hours worked across 50 days, as well as 400 pages of paper documents and an average of $7,000 in costs.
But when COVID struck, sparking numerous lockdowns, lenders were forced to turn to automation and web-based meetings to keep their businesses running.
Despite initial fears of a mortgage meltdown, it proved to be a blessing in disguise and a game changer for the industry.
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Overnight, lenders digitized face-to-face processes, including mortgage applications, e-verification of income and assets, drive-by and automated appraisals, and hybrid closings.
The result was improved margins, increased cost efficiency and relatively seamless end-to-end customer transactions.
Consumers, in the meantime, showed an increasing appetite for digital mortgage experiences that have continued to skyrocket since the pandemic.
The benefits of leveraging technology are for everyone to see, as fintech lenders are now able to process applications 20% faster than traditional lenders.
And thanks to the way mortgage technology platforms have evolved post-pandemic, almost every aspect, from Customer Relationship Management (CRM) and loan origination software, Point of Sale (POS) and Document Management Systems (DMS), as well as product and pricing engines, have made a qualitative leap.
Here's the top 10 loan origination software to use for mortgage industry.
However, despite tech platforms coming on in leaps and bounds, progress this year has reportedly slowed and digitation remains uneven across certain industry sectors.
In practice, because firms are still heavily reliant on human interaction and manual processes, it can still take up to two months on average to process a loan.
Siloed working has seen newly digitalized customer-facing processes built on legacy infrastructure, resulting in an unhappy marriage between transformed customer-facing processes and largely manual – and archaic - mid and back-office procedures, leading to inefficiency, errors and delays that serve only to slow down every stage of the origination process.
But like it or not, there is no going back, thanks to tech-savvy non-bank lenders and increasingly demanding borrowers, who expect quicker, more convenient service times, and more timely communication.
Those lenders that provide a sub-standard service and poor communication can, at the very least expect, negative reviews from disgruntled consumers, even if a loan is closed on time.
At worst, it will mean a drop in customer demand and profit margins.
It need not be like this. According to fintech specialist, FundMore.ai, the answer lies in unifying the entire lending process across front-, mid- and back-office operations, utilizing a single, centralized data source in order to obtain a seamless integration between processing, underwriting and closing teams.
Migrating to the right cloud-based LOS can also enable lenders to provide instant, real-time updates, while underwriters can focus on the more complex loans or high-risk deals.
The future looks even more promising with end-to-end digitalization, meaning both lenders and borrowers will be able to use single digital platforms that will allow access to every aspect of the home buying process, including mortgage payments.
To find out how to deploy end-end digitization and increase profitability while reducing risk, download Fundmore’s whitepaper now.
