Loan Processing Advice for Mortgage Brokers

Buying a home is an exciting process for most first-time homeowners, but also is one of the most challenging thanks to the obscure mortgage loan process. Most research point to the fact families tend to feel overwhelmed when applying for a new mortgage loan because of the paperwork involved and the time and manual effort required.

In such cases, it is the mortgage loan processor who can help customers feel welcome and ease their anxiety levels. Mortgage loan processing is not an easy task, especially since they are the front for the entire mortgage company or business with whom the customers deal directly. From preparing the mortgage loan information application and presenting the same to the underwriters, to ensuring all the documentation is collected and characterized properly, loan processors have a lot on their hand. A timely and properly processed loan file not only helps reduce the amount of time to process a loan, but also has a direct effect on overall customer satisfaction.

Timely Loan Processing Advice for Global Mortgage Brokers

Year upon year, the rules and regulations for mortgage lending keep getting more stringent. Lenders, therefore, start looking at cost-effective and timely loan acquisition strategies as the origination volumes steadily go down. Keeping the following pointers in mind can not only help mortgage processors improve compliance, but also remove inefficiencies which are acting as the bottlenecks to a successful mortgage lending operation.

1. Due Diligence is Extremely Important

   Not being able to determine an applicant's ability to repay properly is extremely important during the loan processing stage. Due diligence is therefore extremely important and loan processors should go beyond the traditional borrower credit score checking and strive to obtain income, employments, and asset documentation as well. Some other factors that should be considered include -

   • Current and expected income
   • Total assets
   • Mortgage monthly payments and other simultaneous loans
   • Other costs such a property tax etc.
   • Total debts, alimony, child supports, maintenance, etc.
   • Monthly debt-to-income ratio

2. Hire Only the Best Loan Processors and Outsource if Necessary

   Whether you are running your own mortgage company or have a small team of mortgage loan processors, it is extremely important that you recruit, train, and re-train only the processors who create a lasting impression. The expenses associated with employing a loan processing unit working full-time is a lot, and includes working compensation, social security, health benefits, etc. With the rising challenge of dwindling mortgage takers, and faced with ever-increasing competition, a lot of mortgage companies are outsourcing their loan processing operations to an effective servicer provider with good credibility.

3. Enhance the Customer Experience

   Outsourcing your processes or maintaining an efficient team is just the first step towards a holistic mortgage origination process. Not only can you clamp down on last-minute fire drills by improving the visibility into borrowers activities, but also reduce the total number of days it takes to close a loan application. Even a small reduction in this time can help you generate more business, while allowing you to streamline your loan processing activities for better customer satisfaction.

4. Combat Growing Risks with the Help of Integration and Standardization

   One of the main issues facing mortgage lenders worldwide is the growing risk associated with green-lighting mortgages they wouldn't have a decade back. Much of this is to do with borrowers not being able to pay back, but risks can come from many different areas as well. Therefore, the integration of critical functions such as collateral, credit, and fraud will not only help you define a common set of priorities, but also help to unify budgets and measurements metrics. This would, in turn, allow you to achieve your revenue goals faster too, while saving time and money due to standardized processes across the board.

5. Manage Costs Efficiently by Outsourcing

   Outsourcing loan processing tasks have helped numerous lenders around the world by allowing them to free-up existing resources tired of doing back-breaking level 1 jobs. Outsourcing is always a valid strategy, more so in the case of mortgage processing where 70% of the work only requires a trained eye and not customer-retention and convincing skills. By outsourcing loan processing backend work, you can see a virtual increase in the amount of work getting completed on a daily basis, further allowing you to close more loans.

6. Protect Against Costly Repurchases

   Many lenders, in their enthusiasm to streamline the origination and loan processing process, take their minds off protecting themselves against fraud and litigation. It is imperative, therefore, that you always the weigh compliance and consistency against your customer satisfaction initiatives. In your quest for better customer satisfaction, always keep in mind that even an increase of 3% DTI in a slow-growth year can cause loan repurchase demands. Therefore, a close review of inquiries related to credit made by your loan processors, as well as an in-depth understanding about any other additional loan activity is important to the whole process.

The Future of Mortgage Loan Processing

Technology; a single word which is changing the way we live and interact with each other has also had a profound impact on the entire mortgage loan process. As more lenders and single-entity loan processors start embracing new technology, we can expect to see quite a few of these modern trends become a reality soon -

• E-signatures - Although commonly being used today in different manners, e-signatures; ever since they became a legal method for signing documents, have sped up the loan processing times around the world. Not only can loan processors now automatically create an electronic archive as soon as an e-signed document arrives, but also save time in verifying the signature for fraud compliance.
• Loan Processing Apps - Pretty much like an automated project manager, loan processing apps are on the rise and allow every stakeholder and person, including the customer, stay in sync with the loan process timeline. Such apps boost communication between borrowers, lenders, and the middle agents, while checking the status of applications received, applications submitted, appraisals ordered, applications sent to underwriting, etc.
• Simplified Mortgage Lending Apps - Many apps, such as Xome, Lenda, vLoan, etc. are making use of interconnectivity and the social aspects of buying a home to match borrowers to their ideal lenders, while boosting transparency throughout the lending process. This has transformed mortgage lending from a long-drawn out process, into an interactive, customer-focused one.

Choose Flatworld Solutions for Loan Processing Services

At FWS, we have seen technology and customer preference change the mortgage support services landscape in the space of a few years. Today, banking and lending interactions hinge on customer satisfaction, and mortgage lenders need to continuously adapt to the changes in order to stay relevant in an increasingly crowded market.

We make it our business to provide you with the best quality mortgage loan processing support services which can help you lower costs, improve customer relationships, and reduce risks related to compliance. We seamlessly integrate with your back-end systems and applications, while offering you with a scalable and flexible expansion strategy.

If you like our loan processing advice, or would like to know more how our mortgage services can help you, contact us right away! We will help you develop a finely tuned strategy which would help you achieve your goals faster.