By Marty Gulewicz, Banking & Finance Engagement Manager 

The whole purpose of the mortgage process is for the lender to asses an applicant’s risk level. Will they be able to pay back the loan? How likely are they able to default on the loan?  Does their employment history align with their ability to pay off their debts and obligations?  What type of customer will they be for the bank? 

These are questions that each underwriter needs to answer when assessing an applicant’s application and supporting documentation. When assessingthe underwriting process can be a bit tedious from:

  • Collecting and capturing the proper data/documentation 
  • Entering data into the LOS (Loan Origination System) 
  • Ensuring that all documentation is submitted 
  • Comparing the data for accuracy  

And since the beginning of time, mortgage lenders have been trying to figure out how to increase the number of applications they review. The more they can review and approve the more loans a lender is able to generate.   

With RPA being all the craze lately, we’ve been asked, Can robotic process automation (RPA) really fit into a complex process like the mortgage process? Well, let’s see!  But first – always start with the basics. 

What is RPA? 

In the simplest form, Robotic process automation software automates repetitive computer tasks or commonly known as “swivel-chair tasks,” and was ranked the fastest-growing enterprise software by Gartner last year. This doesn’t come as a huge surprise– not just because RPA has such a huge impact on employee productivity, but because it’s a fairly simple technology compared to other emerging technologies like artificial intelligence and blockchain. 

RPA in Mortgage 

RPA is best when used for simple yes or no questions and ifthen tasks. Since the mortgage underwriting process is littered with these types of conditionsIt actually makes it a perfect fit or the mortgage process.   

RPA can easily capture and input loan data into the LOSThis automates one of the most tedious and time-consuming parts of an underwriter’s job– manual data entry– allowing them to spend more time analyzing unstructured data, like letters of explanation from the borrower or just evaluating the loan application as a whole. RPA also guarantees the accuracy of data entry in the LOS, since human errors tend to be common after repeating the same copy-and-paste action over and over again.  

What About in Post-Closing?

The post-closing process involves thorough reporting, cross-checking, and auditing to make sure everything in the application and various systems are correct. It can take hours and sometimes even days to cross-check mortgage in the LOS against tax forms and other supporting documents.  

Post-closing lends itself perfectly to RPA as most of thsteps are data validations and can be completely automated with intelligent bots. RPA eliminates the need for a human to cross-check documents as well as the time spent fixing errors after the fact since it eliminates keystroke errors altogether. This guarantees a much faster processing time and higher customer satisfaction.  

Okay, What About in Servicing?  

Not all lenders service their own loans for various reasons. Some lenders will use 3rd party service providers and others may even just sell the loan altogether.  And when your loan is sold or using a 3rd party to service, information can easily  become lost.

Rohit Chopra from the U.S. Consumer Financial Protection Bureau told NerdWallet, “Borrowers told us they’ve experienced lost paperwork, processing errors that resulted in late fees, interruptions of routine communications like billing statements.”  

Not surprisingly, accuracy is not a human’s strong suit when we’re talking about high volumes of manual data entry, especially when data is moving from one system to another. Entry errors such as incorrect monthly payments or even an incorrect date on a form can negatively affect the borrower’s credit score, which may trigger unwarranted fees or can prolong the process overall.  

While this certainly hurts the client, it hurts the financial intuition in the long run. Customers will associate your mortgage services as inefficient, negligent and burdensome. RPA is perfect for taking over the manual nature of data entry, especially in processes like loan servicing where human error is likely.

In the age of automation, it can be overwhelming to begin to investigate what technologies can assist with different use cases and processes. RPA is a great option to begin your automation journey because it’s very easy to get going and show ROI. 

By automating steps in the mortgage process like data entry and cross-checkingemployees can focus on helping the company grow instead of fixing mistakes. The underwriting, post-close and servicing processes are great places to implement RPA to increase employee productivity, customer satisfaction, and overall efficiency.  

If you’re thinking RPA implementation sounds great, but are worried about the workplace impact it would have, check out our blog on preparing employees for RPA. 

RPA for Mortgage Industry