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What Is RPA, and Why Is It Revolutionising Mortgage Processing?

The mortgage industry isn’t for the faint of heart.

Only five of the top 20 mortgage companies and loan originators in 2006 were still alive and kicking a mere six years later. The rest had either gone bankrupt or got bought after the 2007–2008 housing bubble burst.

Macroeconomic pressures aside, brokers and alternative lenders also have to contend with robust competition. And it’s not just good old banks they need to worry about: Non-traditional lenders accounted for a whopping two-thirds of US mortgages in 2020.

Add this to the fact that some estimates say that it costs $8,243 to originate a loan. And that in the US, mortgage processing can easily take 40 to 50 days! No wonder turning a profit in the mortgage industry is a challenge.

It’s not all doom and gloom, though. 

Enter robotic process automation (RPA). Robotic process automation technology can drastically reduce your costs, accelerate mortgage loan application processing from weeks and months to minutes, and deliver a potential ROI of 30–200% in the first year alone. 

Here’s how it works.

What Is Robotic Process Automation?

Robotic process automation is software that automates repetitive and routine processes that humans normally do — the so-called swivel-chair tasks — by minimising or completely eliminating the need for human intervention. Most definable, rule-based, and workflow-driven processes lend themselves to automation, including yes-or-no questions, if-then tasks, and more. 

Imagine being able to assemble a lender packet in a fraction of the time! Or processing additional documentation like W-2 forms, income documents, property taxes, credit card statements, or bank deposits automatically. 

And compare that to what you’re doing now (even if you’re using traditional mortgage processing software). 

How Can RPA Help with Mortgage Processing?

RPA is great news for the mortgage industry. If you’re a mortgage underwriter, title company, mortgage lender or loan processor, you understand how harrowing the current mortgage process is. Processing loan applications is fraught with repetitive back-office processes and paper-based tasks, making it a perfect fit for robotic process automation.

By leveraging RPA, which performs repetitive processes more quickly and accurately than humans, you save money, resources, and have more time for more valuable, higher-order tasks requiring reasoning, emotional intelligence, and customer interaction.

“RPA takes the robot out of the human.” 

Leslie Willcocks, Professor of Technology, Work, and Globalisation at the London School of Economics

As Leslie Willcocks, professor of technology, work, and globalisation at the London School of Economics, put it, “RPA takes the robot out of the human.”

Here are just some ways in which RPA can support mortgage application processing:

Underwriting

You can utilise RPA at all stages of the mortgage underwriting process

To start, RPA automatically collects, captures, and inputs customer data and documentation into your internal loan origination system. 

This completely eliminates manual data entry, which is one of the most time-consuming parts of underwriting, enabling you to spend more time analysing unstructured data, evaluating applications as a whole, and answering customer questions.

You can also use RPA to:

  • Ensure that all required information is submitted.
  • Automate credit prequalification by fast-tracking the best scores, rerouting less-than-ideal scores for further analysis, and automatically rejecting poor ones.
  • Send automated approval or rejection emails to customers.

Post-Closing

The post-closing process requires thorough auditing to guarantee that everything in the application and supporting documentation is correct. 

Traditionally, manual cross-checking would take hours and sometimes days and weeks. With RPA, you can scan documents for errors or missed fields and compare the accuracy of data across multiple locations in minutes.

In addition to removing the need for manual cross-checking, RPA drastically reduces the time spent fixing errors since it eliminates manual data entry errors altogether. 

Servicing

Many lenders outsource mortgage servicing to third-party providers, and some sell the loans altogether. In both cases, you need to move large volumes of data from one system to another.

If you do it manually, critical information like bank statements, credit card documents, and  credit history paperwork can easily get lost. Data entry errors also abound, resulting in late fees, incorrect monthly payments, and even mistakes in the borrower’s credit score. 

All of this hurts productivity, your customer’s experience, and your bottom line. By automating data entry, extraction, and verification, RPA puts an end to all that. 

Want to Learn More About What RPA Can Do for Mortgage Processing?

Innovative technologies like cloud automation and robotic process automation are the future of the mortgage industry.

Ready to learn more about Unitek’s DPA solutions? Request a demo to see our platform in action.

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