Mortgage origination software
Mortgage origination software

Legacy systems still rely on manual processes leaving lenders with no time for process improvement, enhanced customer experience, and analytics. They spend most of their time managing simple repeatable processes.

In a customer-driven landscape, lenders must adopt automation to remain competitive and profitable. Now, this is where origination software comes into the picture. It takes mortgage lending to the next level of digitization. Not only it reduces the time required to grant a mortgage, but it also reduces the complexity of the process.

In this article, we will discuss ten benefits of using mortgage origination software. But before, let us briefly discuss origination software.

What Is Mortgage Origination Software?

Mortgage origination software allows you to manage and automate various stages of the lending cycle. From data collection to fund disbursement, it digitizes the complete lending process. It enables businesses to process and approve or deny loans faster.

Besides, the software also reduces compliance risk and provides real-time activity monitoring. Lenders can simplify processes, configure rules, and gain operational efficiency at all levels. It means fewer errors and higher productivity.

Furthermore, mortgage software integrates with CRM solutions (Customer Relationship Management) to enable loan officers to bring in more business every day. It reduces customer acquisition costs and connects all the teams involved in the mortgage lending process.

Benefits of Mortgage Origination Software Infographic

10 Benefits of Using Mortgage Origination Software

1. Better Customer Experience

According to Fiserv, 67% of the existing home loan consumer in the United States feel comfortable with an online application. It shows the rising demand for origination software in the country.

Document processing during mortgage origination and close takes a lot of time. It might range anywhere between a few weeks to several months. Along with this, seasonal holidays and weather conditions make it even hard to improve customer experience. Therefore, using mortgage software makes all the sense. It offers simplified operations, which directly leads to improved customer experience.

2. Improved Accuracy

Humans are likely to make ten errors for every 100 steps. It is also true when carrying out redundant work, such as the one involved in mortgage processing. For instance, one of the reasons for inaccuracy in workflows is fetching the applicant’s details from multiple sources for verification. Manual data entries may lead to errors, and there is usually no provision for cross-verification. Such errors during mortgage processing can take a lot of time to fix.

Using the software will automate the process while providing error-free work. Thus, resulting in improved accuracy and faster processing. Therefore, lenders must leverage the power of origination software as soon as possible.

3. Enhanced Productivity

Buyers are looking to get the keys to their homes in the shortest possible time. Even lenders want to ease the entire mortgage process as much as possible. But loan officers pursue multiple interactions with the potential borrowers and clarify their doubts, negotiate terms, etc. It might also require revision of paperwork, which is usually a replication of the task already being done. These repetitive tasks in application processing make it difficult for lenders to close deals faster.

Loan origination software helps in simplifying the processes from start to finish. With no lost or misplaced paperwork, lenders can review applicant materials more quickly. All these ensure higher productivity while closing more loans in less time. 

 4. Accurate Decision-making

Mortgage origination software improves the application evaluation process. The software automates different rules which the applications must meet to qualify. It can evaluate customer attributes and offer immediate approval to qualified applicants.

On the other hand, it can reject applicants who have no credit history or over-extended credit. Thus, automation through software allows lenders to focus their time and effort to grow their business.

Another point to note here is – many lenders use CRM software to integrate all their core systems into one centralized system. For instance, by integrating LeadSquared mortgage CRM with loan origination system, productivity tools, credit scoring service, or any other custom internal tools, such as ElliMae, Calyx, Experian, Black Knight, Equifax, Credit Plus, Mortgage Coach, etc., lenders see a holistic picture of their activities, processes, strategies, and business.

5. Better Fraud Detection

Mortgage fraud is on the rise in America. According to Core Logic, one in 109 application have indications of fraud. Therefore, lenders have to adopt various strategies to mitigate fraud-related losses.

With origination software, lenders can effectively leverage the power of predictive analytics. It can help lenders to determine the risk of disbursing a loan to a particular buyer. Because of automation, lenders can configure which loan types require fraud analysis. Therefore, reducing the probability of losses and frauds.

6. Consistent Workflows

Lenders will agree that their current processes are not well defined. There are too many variables, such as document collection, data entry, processing, and many more.

The use of software can streamline several workflows. Of course, it will speed up the process, but it will also help you standardize the entire process for better efficiency. With each step becoming digital, you can also gather more data for analysis. An in-depth look into the business processes will improve your decision-making process.

7. Improved Compliance

Mortgage lenders have to comply with complex government regulations. And at the same time, they have to manage the risk associated with the lending process.

Mortgage origination software offers a better way to comply with regulations and maintain a lower risk profile. They can improve their quality and create consistency in the processes. For example, if the Government announces an update, lenders can modify their terms and conditions instantly and update and communicate the same to every stakeholder without a miss. Thus, mortgage software allows them to function well every single time.

8. Analytics for Process Improvement

Using the software opens the door for analysis of your lending practices. You can use the data to determine whether there is scope for improvement in the lending process. Moreover, you will get to know where you are performing well. It will tell you where you need to improve your processes for a better customer experience.

With analytics, you can determine which factors have more influence on loan performance. Therefore, allowing you to accept more applications with those attributes. You can also identify bottlenecks, time-consuming manual steps, and improve them with automation.

Process improvement is essential for profitability and to remain competitive in this volatile market. Analytics can help in monitoring the overall business performance and improve process efficiency.

9. No Paperwork

Paperwork is the biggest problem lenders face in their daily work. Paper registration and creating manual reports are clumsy and a thing of the past. Moreover, filling these papers takes a lot of time.

Using origination software, lenders can eliminate the entire paperwork. They do not have to go through hundreds of files to search for individual data. Using the software, they can get any information within a few minutes.

The self-serve portals are also gaining popularity among lenders. It can either a part of the mortgage origination software or can be a stand-alone application integrated with a CRM solution. By using self-serve forms, lenders can move their application process online – providing a smooth experience to borrowers. There is another benefit to using self-serve portals with mortgage software. If the applicant drops-off without completing the application, your call-center team or sales reps can contact the applicant to complete the application. It does not require re-filling the application from the start. Applicants can resume from where they left.

Watch the webinar: how to ensure a paperless and contactless lending process?

10. Cost Savings

By automating repetitive processes, lenders are saving both time and cost. With comprehensive borrower profiles and validating their information from several sources, lenders can reduce bad loans substantially. However, using software solutions also bring some indirect benefits to financial services organizations. These are:

  • They no longer have to employ people who were doing data entry.
  • Employees can focus on other tasks that require more attention instead of wasting time in finding information from multiple sources.

Instead of maintaining piles of documents and storing records on applications, lenders are also saving a lot of money on papers, folders, toners, and other similar items. These factors may seem trivial but can significantly impact the bottom line of the lending institution.

The Bottom Line

Technology positively impacts our daily life. It increases quality, productivity and improves consistencies of products and services. It is no wrong to say that only a few industries can remain profitable and competitive without it. And lending institutions are no different.

Financial services companies can take advantage of software in many ways. From simple processes to no paperwork, there is so much to offer. Furthermore, the availability of electronic data provides you with a competitive advantage. The data brings invaluable insights to improve and grow your business.

Moreover, an increasing number of buyers are demanding a complete online experience. Therefore, not using a software solution means that you are losing potential customers.

If you’re looking for a solution to improve sales productivity, marketing visibility, and referral management, then you must consider LeadSquared mortgage CRM.

Mortgage Origination Software FAQs

1. What is the mortgage origination process?

Mortgage origination is the process by which a borrower applies for a loan, and a lender processes that application. It includes all the steps of the lending decision – from taking a loan application up to the disbursal of funds or rejecting the application.

2. How can loan origination software help?

Loan origination software can help lenders in automating the loan application process, documentation collection and processing, underwriting, credit decisions, risk analysis, and loan funding.

3. What software do mortgage brokers use?

Mortgage brokers are intermediaries between individuals and lenders. Mostly they route the borrowers to the lenders, while some may also process loans on behalf of businesses. To manage loan inquiries and for borrower engagement, they generally use CRM software. Mortgage brokers also use loan origination platforms for their businesses.

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