Why invest in mortgage automation and cloud-based systems?

Instant service and faster turnarounds are the expectations from customers today. Mortgage Process Automation and cloud-based loan processing systems are proving to be assets in the mortgage industry. Outdated legacy systems are slow in loan processing, and paper-dependent systems are prone to errors. Our previous blogs have talked about Mortgage Blockchain and Mortgage Process Automation transforming the mortgage industry. Here, we will explore how investing in mortgage automation, cloud-based systems will benefit your lending business.

FinTech Startups disrupting the Mortgage Industry

During the COVID-19 pandemic, many financial institutions shifted their businesses to online services to keep in touch with their customers. FinTech startups are using mortgage blockchain to make loan applications faster and more affordable. There is transparency in the lending process. Some FinTech startups are providing Mortgage blockchain-based end-to-end solutions. It involves quick and secure data retrieval and validation from third-party providers, including government agencies. Mortgage blockchain technology is allowing the entire mortgage underwriting to be digital. FinTech startups have to meet customers’ expectations of speed, personalization, and transparency in the mortgage processes.

Image 1-Statistics in FinTech space in 2020

Image source: https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf

Mortgage Blockchain and FinTech

According to experts, the global FinTech blockchain market may grow to $9.2 billion in 2025 from $1.23 billion in 2020. There is an upward trend in using technology like Artificial Intelligence (AI) and Machine learning (ML), Blockchain, and RPA in financial services. According to expert opinion, these technologies will reduce the operational costs by 22% by 2030. Blockchain technology is helping in combating any advance cyber attacks in financial services. Mortgage Blockchain is countering the challenges faced in the mortgage industry by creating infallible transaction records.

Adoption of a cloud-based Loan processing system

A cloud-based Mortgage Loan Origination system enhances the entire loan origination process. Mortgage companies require cloud-based technology for the incorporation of encryption and security features in the Mortgage LOS platforms. Customers can access cloud-based LOS from any device such as a smartphone, tablet, etc. Cloud-based LOS has several benefits such, as

• Management of documents related to the mortgage process to be stored and secured in a centralized system
• Customer data and records are authenticated and verified by systems
• Improvement of customer experience by reducing paperwork and overall processing time, thus reducing the high processing fee
• Quick implementation of the cloud-based Loan processing system as there is no need to download software
• Ensures reliability to the user as the data is stored on a centralized server and made available at any time
• Easy accessibility of data as it is stored on a cloud server and is available on any device at any time
• Automation of all processes gives ample time to the lenders and borrowers for exploring other loan products

Image 2- Benefits of cloud-based mortgage LOS

Cloud technology allows flexibility to manage applications on the best-suited infrastructure. Legacy systems do not work in the cloud. By adopting cloud-based Loan processing systems, mortgage companies and financial institutions can cut operational costs. The mortgage companies can save the expenses required for hosting data on-site and on their servers. The mortgage lenders can transition to cloud servers with the right resources and technical expertise and reap the benefits. inflooens has the best mortgage LOS that meets the requirements of mortgage lenders. It provides the best customer experience and satisfaction and quick closing of loans.

Effects of Mortgage Process Automation on Mortgage Lending

Mortgage Process Automation tools contribute to a faster processing time of mortgage loans. Mortgage lenders are designing smart workflows to separate tasks between bots and humans. It is helping mortgage lenders utilize the highly valued human resources for tasks requiring human intelligence and judgment. Digital transformation of mortgage loan processing is vital for mortgage lenders in 2021. AI tools like voice assistants and chatbots have assisted mortgage lenders in weathering the COVID-19 pandemic. Mortgage Process Automation is at the forefront of meeting the needs of customers and loan officers. The advantages of using RPA bots enables organizations to tackle mundane, repetitive, and rule-based processes. Examples of these processes include verification of pre-funded data, services such as title, credit, etc. Robotic Process Automation (RPA) and AI provide audit trails and reduce compliance risks. Mortgage process automation has several benefits for banks by transitioning to online-based electronic forms and speeding up customer’s loan application processes. Mortgage Process Automation is managing various mundane but crucial tasks of FinTech firms. Mortgage lenders can improve the efficiency of their mortgage processes by ensuring data accuracy and facilitating regulatory compliance.

Image 3- Advantages of Mortgage Process Automation in Mortgage Lending business

With Mortgage Process Automation, Loan Origination Process is not as time-consuming as before. Documents such as appraisal reports, Title reports are verified, validated, and uploaded in a mortgage LOS. Mortgage loans are closed quickly and efficiently by stacking and indexing all the electronic documents. Each mortgage lending business needs to have to best Loan Origination System, which inflooens provides to its customers.

Finally

Mortgage lending businesses require mortgage automation and cloud-based systems to improve the effectiveness of services. They are transforming the mortgage lifecycle with shorter and quicker implementation. Mortgage Process Automation allows seamless, personalized loan processing. Cloud-based LOS decreases operational costs and increases process efficiency. Cloud-based Lending Systems are customized according to the lender’s needs by Inflooens.

5 ways Fintech Startups are Preventing Loan Defaults

Lending is a risky business. Whether your business is large or small, managing cash flow is a challenging task. When Mortgage lending companies are giving a loan to any customer, they are taking on a huge risk. Even though loan applicants undergo thorough eligibility checks, there is a chance that the lender might not be able to recover the money if the customer faces unemployment and/or loss of income. According to the Mortgage Bankers Association’s (MBA) National Delinquency Survey, the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 7.65 percent of all loans outstanding at the end of the third quarter of 2020. Nonetheless, the 90-day and over delinquency rate continued to grow and reached its highest level since the second quarter of 2010.

Figure 1: Mortgage Delinquency Rates

Further, due to the current pandemic situation, there is an increase in job losses resulting in reduced revenues. Customers are forced to seek external financial support. This calls for a robust system to achieve timely recovery and avoid delinquencies. At this point, the collection of debt through automation comes into the picture. FinTech startups are leveraging a large amount of available customer data to automate the whole process of Mortgage CRM and Mortgage Origination. Let’s look at the 5 ways in which Fintech startups are proving to be a game-changer for preventing loan defaults.

Machine Learning in Mortgage CRM for Debt Recovery

The process of lending money and recovery of debt has been made easy by Machine Learning (ML). FinTech startups use ML to streamline the process of lending. The credit models used can deal with every stage of lending, for example preparing credit score, credit history, eligibility for loan/ loan amount, risk management, and debt collection. ML also helps to comply with regulatory rules and guiding principles. Therefore, ML is a huge advantage for lenders dealing with the repercussion of loan defaults. At the same time, it is beneficial for customers too, by providing the current tech-savvy customers speedy access to loans with a negligible amount of paperwork. inflooens is the smartest mortgage CRM that uses AI and ML to streamline the mortgage lifecycle.

Bulk Automated Messages to Stay Connected with Customers

Automation can be used to send reminders and messages to borrowers for payment of loan installments. Lenders can opt to include debt amount, date of payment, website link for secure online payment options in the messages. These messages can be sent via text or email depending on the customer’s channel of choice. Automated messages not only help in reducing delinquency rates but also help in improving customer service. Fintech startups are including the feature of automated messaging in mortgage CRM platforms for ease of business. inflooens Mortgage CRM allows automated follow-ups and transparency throughout the mortgage process.

Automated Tools Helps to Analyze Customer Payment Cycles

FinTech startups have developed mortgage CRM platforms that use technology to provide lenders information about the best time to connect with the customers and the most appropriate channels of communication. This makes it easy for lenders to recover debts by contacting customers at the right place and right time. Further, the technology also helps to pin-point irregular payment cycles and identify risky customers. Machine Learning can use advanced algorithms to predict delinquency and help in mitigating lending risk. inflooens provides a reliable and efficient mortgage origination platform that helps in reducing risk and enhancing customer experience.

Customers can select preferred language

Many mortgage lenders operate worldwide or have a varied customer base in their given locations. This can lead to language barriers and difficulty in communication. With Automated Customer Service portals like IVR or applications, Fintech startups are enabling customers to customize their experience. They can select their preferred language which eases the communication process. This in turn makes the collection process smoother and also reduces the cost of following up with the customers over and over again. Nonperforming loans are not only a hassle to deal with, but they are also costly because they need an investment of resources to service without returns.

Image 2: Cost of loan servicing

Personalized payments plans

The FinTech startups help the customers build their payment plans. Here, the customers can set their debt payment dates which are, say, within the week of their salary day, without any human intervention. The customers can also opt for lower monthly payments if they happen to lose a job. Since technology is customer-centric, the customers can take control of their finances. Even cases of forbearance and cash-out refinancing are made easier to deal with by FinTech Startups. We have discussed both these topics at length in our previous blogs. inflooens is the best mortgage CRM that provides information at your fingertips and makes the personalization of payment plans faster and simpler.

Conclusion

The FinTech startups are developing automated tools that extract, corroborate, and process all amorphous data and give systematic reports to reduce operating costs, increase accuracy, and reduces default levels in a fully verifiable and transparent way. They provide tools that are proving to be a win-win situation for mortgage lenders as well as borrowers resulting in increased efficiency, enhanced customer experience, reduced loan defaults, and eased debt recovery. The digital debt-recovery solutions are being used to streamline their lending businesses and collection processes.

How is Mortgage Process Automation Transforming the Mortgage Industry?

When you are expecting quick results, manual, time-consuming processes can cause a headache, be it, the US elections or Mortgage Loan processing. The need to have Automated systems incorporated in these processes will give you faster results. Digital transformation is the need of the hour. Complex legacy systems and manual processing have become redundant.In this blog, we will discuss how is Mortgage Process Automation Transforming the Mortgage Industry.

Digital Transformation in the Mortgage Industry

Banking and FinTech have adopted digitization in their systems for a long time. Automation tools like Hyperautomation, Robotic Process Automation (RPA), Chatbots, etc. have enhanced business continuity across industries, particularly the Mortgage Industry. According to Fannie Mae’s Mortgage Lender Sentiment Survey® , the Mortgage Lenders involved in digital transformation on workforce management issues saw increased advantages over their competitors. These advantages included increased productivity, reduced errors, lower costs, etc. as mentioned in below Figure 1.

Figure 1: Survey of the impact of Digital Innovation in the Mortgage IndustryImage:https://www.fanniemae.com/research-and-insights/perspectives/impact-digital-innovation-lender-workforce-now-and-looking-forward

We have discussed the technology trends that have disrupted the Mortgage Industry in our previous blog.The Mortgage industry is predominantly process-oriented and is involved in numerous processes such as fraud check, appraisal orders, title orders, etc. Also, Mortgage applications have increased by 3.8 percent for the week ending October 30, 2020. To provide high-quality products, mortgage lenders need to adopt up-to-date and integrated mortgage process automation software technologies.

Benefits of Mortgage Process Automation

Mortgage Process Automationutilizes cloud and web technologies to accelerate Mortgage Lifecycle. Apart from accelerating the Mortgage process, there are other benefits of Mortgage Process Automation:

Figure 2: Benefits of Mortgage Process Automation

Inflooens’ Innovation in Financial Services is transforming the entire Mortgage Process by using Inflooens’ Empower Framework. It enhances the customer experience by providing an easy-to-use portal that gives information at your fingertips.

Types of Mortgage Process Automation

Process automation primarily refers to the automation of a process using a computer and its software. There are different types of process automation tools. Chief among them are Business Process Automation (BPA), Hyperautomation, and Robotic Process Automation (RPA). Automation tools are vital for customer relationship management (CRMs) as it enhances customer experience. More than 70% of Mortgage Processes are easily replicable and are prime candidates for automation.

Business Process Automation (BPA)

It is a business-specific type of automation. It is also called Information Technology Process Automation (ITPA). BPA automates the processes and workflows. It works on business rules, structured data, and unstructured data.It helps in streamlining processes, reduce paperwork, minimize costs, and decrease the time taken to do repetitive tasks. The software that enhances BPA is Robotic Process Automation (RPA).

Robotic Process Automation (RPA) and Mortgage Industry

Robotic Process Automation is a software application that uses software robots (bots) to automate tasks done by humans. RPA accesses the front-end of existing systems and performs the tasks done by a human through automated object recognition, optical character recognition (OCR).

The uses of RPA in the Mortgage Industry illustrated below:

Figure 3: Uses of RPA in the Mortgage IndustryImage:https://sf.freddiemac.com/articles/insights/mortgage-technology-trends-robotic-process-automation

The advantage of using RPA is that it can cut costs without the need to invest in expensive infrastructure and systems. It helps to minimize human error, increase accountability, and allows swift turnaround time. RPA platform automates tasks like data entry, document routing in lesser time. RPA enables Lenders to use their resources for complex issues that require human intervention.

As all manual processes are not suited for RPA implementation, Mortgage Lenders need to analyze and evaluate their existing processes before implementing RPA in the critical areas. RPA cannot replace Mortgage LOS, but it enhances the working of the prevalent quality systems.

Hyperautomation in Mortgage Industry

Hyperautomation is a combination of technologies like Artificial Intelligence (AI), Machine Language (ML), Robotic Process Automation (RPA), and Natural Language Processing (NLP). According to Gartner Top 10 Strategic Technology Trends for 2020, Hyperautomation is at the forefront of automation technology.

Hyperautomation in Loan Processing provides lenders insights into the customer requirements based on the facts and behavioral analysis of customers. It combines the automating factors of AI and RPA for effective automation of documents as well as sourcing information speech recognition, image processing, etc.

Hyperautomation is a cognitive automation framework that is a boon for Loan Origination Systems, enabling them to process loans at a faster pace. Any loan discrepancies or changes can be detected immediately by Hyperautomation. The use of AI-enabled chatbots is enhancing the customer experience. Also, accurate customer information gets entered into the central system without any errors.

Inflooens’ Post-Closing Automation feature automates customer’s paperwork to save valuable time and resources. The hassle-free post-closing process is reliable and efficient.

Conclusion

In the competitive workplace, Mortgage Lenders need to adopt Mortgage Process Automation to stay ahead in their business. Automating mortgage processes will reduce the stress of the Mortgage Lenders by removing bottlenecks to make the Mortgage Process easier. Inflooens Mortgage CRM platform is the smartest Mortgage CRM in the market that makes the borrowing journey for customers truly digital and customer-centric.

Customer experience – the differentiator in US Mortgage industry

A customer experience is a way the customer engages and experiences to your product or service. In Banks, Financial institutions its of paramount importance because its a ongoing process specially when associated with Mortgage.

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett

As Covid19 grips the US economy, the Fed has cut its target for federal funds rate ,the rate banks pay to borrow from each other overnight, by a total of 1.5 percentage points since March 3, bringing it down to a range of 0 percent to 0.25 percent. This has got a new nucleus to virtual lending – Mortgage. The heat is felt by all those Financial Institutions who have yet not adapted digital transformation in Mortgage. With record numbers of consumers now seeking to refinance and home buyers taking advantage of ultra-low interest rates to enter the market, there has never been a better time for banks, mortgage lenders, financial institutions and credit unions to make their mortgage operations virtual-friendly.

Loan origination process is transforming like never before in a competitive market in these unprecedented times. Mortgage has taken a centre stage and is a ‘profit excavator’ in Banks, Credit Unions, Financial Institutions, Mortgage Lenders in North America who are yet not using technology.

Recently, McKinsey conducted a survey of more more than 1,200 residential mortgage customers to better understand their experiences and how banks and non-banks can deploy technologies to improve those experiences. Only 42 to 67 percent of borrowers say they are satisfied with the mortgage process, and banks fared worse than non-banks, lagging by about 20 to 30 percent.

As customer experience is the nucleus in Financial institutes so must be of the banks to experience customer mindshare. At finch startup inflooens we worked on the same concept, over last three years. US banking customers are expressing new demands and expectations from their banks as traditional banking customers is declining and digital transformation in Mortgage operations is the key.

This gives loan officers four major pointers when they implement customer experience in their eco-system of digital transformation. World’s smartest Mortgage CRM inflooens is an exact fit as it fits in the process to peak your customer experience. Here are five value additions that loan teams should look that will help in building more trust and acquiring more customers in these challenging times.

1. Truth True 360 view of customers, partners and loan lifecycle. Compliance need to be integrated into the core of the banking. Optimized and consolidated IT costs with easy subscription model.

2. Efforts Customers are looking for ‘same day loan approval’ agency. Loan officer needs outcome based automation.

3. Transparency Its is all about trust and building it in every process of loan management.

Transformation is a cumbersome mortgage process but a super-efficient with the inflooens “Loan Team Optimization Platform”!

With an approach of “Innovation as a Culture” combined with the philosophy to extend human abilities via stunning, intuitive designs, fintech start-up inflooens aims to become the one stop shop to help you close loans lightning fast.

We achieve this via the inflooens Application suite and our Empower Framework powered by the Salesforce platform to address end-2-end lifecycle of the mortgage origination and post origination process.

The inflooens Loan Team Optimization Platform Features

• Mortgage CRM
• Client Portal
• Sales Performance Management
• Pricing and Quotation
• Loan Origination
• Post-Closing Automation
• Predictive Analysis
• Loan and Servicing Center

Do check out www.inflooens.com for more details on how you can improve productivity and increase your customer experience thereby acquiring more customer smiles.