Reducing Risk in Mortgage Post-Closing with Automation

The mortgage post-closing process involves meticulously reviewing loan documents and verifying details like income, employment, and credit history to reduce risks for lenders. But this complex process is prone to errors that can be disastrous if loans must be repurchased.

The COVID-19 pandemic has accelerated adoption of digital closings and remote online notarization, paving the way for more automation in post-closing. Now is the perfect time for lenders to explore automated solutions to streamline post-closing and minimize risks.

Post-closing tasks like verifying loan-to-value ratios, calculating escrow account balances, and confirming employment details can be automated to eliminate manual errors. Digital tools can be implemented to automatically pull data from documents and systems, perform complex calculations, run compliance checks, and populate forms. This level of automation ensures accuracy and consistency across loans.

Ongoing loan servicing functions like Loan Boarding, MSR Transfer Pool insight, and compliance reporting can also be automated. Digital workflows enable the electronic routing, processing, and storage of loan documents. Intelligent systems track loan data to detect issues early and take preventative measures. Automation saves servicing costs while also improving borrower experiences.

Artificial intelligence takes digital transformation to the next level by enabling automated underwriting decisions, early default predictions, and customized loan modifications. AI analyzes alternative data like bank account transactions to generate deeper borrower insights. Machine learning algorithms can be trained on loan performance data to identify patterns predictive of default or other risks. This empowers lenders to take proactive, calculated steps to prevent problems.

A core competency for mortgage post-closing automation is leveraging Optical character recognition (OCR) technology would be implemented to automatically extract data from scanned documents and forms. This eliminates the need for manual data entry, reducing errors and improving efficiency. OCR provides a low-risk way for lenders to start automating post-closing processes like audits and checklist verifications.

Automation not only reduces risks but also improves employee morale by removing tedious tasks. This leads to better customer experiences and higher retention.

The mortgage industry is gradually embracing automation, but lenders can accelerate the process by starting with small steps like OCR. Implementing OCR to digitize documents enables downstream automation of post-closing processes.

Automation makes the complex post-closing process smoother for both lenders and borrowers. By being proactive in adopting automation, lenders can reduce risks and costs while providing an enhanced customer experience. The post-closing process may never be risk-free, but automation brings us one step closer.