Though the lines between home and office have blurred substantially since the start of the pandemic, there is no “Easy Button” for the home finance industry like the one for office supplies (at least in the commercials).
Mortgage originators and servicers continue to face complex challenges, including high volumes and stringent regulatory oversight, all while managing a large cohort of vendor partners. And the rising interest rate environment is forcing more burdensome changes, including increased competition from the reduced refinance business.
We wrote about this recently in an article that appeared in Housingwire.
How do mortgage companies stay above water and on track? Greater efficiency is always the right answer, and new technology will likely be the most popular way to achieve that.
Some challenges Mortgage Originators currently face:
However, it’s quite often not the lender’s operation that is the problem. For both mortgage originators and servicers, that large cohort of vendors must rely on third-party partners that introduce friction and uncertainty into the process. And automation is only as good as the information flowing through, which comes from a gray area of no control nor visibility.
For example, what if a loan processor using a modern LOS to order a flood certification, title report, AUS decision or data verifications does not receive the data after order placement? A default servicer will work with a number of third-party vendors to gather collateral valuation, title information, property inspections, and field services reports. The servicing platform can place the orders easily enough, but then what?
While lenders and servicers have focused a lot of attention on making their internal processes as efficient as possible, they can’t keep tabs on third-party partners and their processes. The lack of visibility there means that they often encounter the failure points that waste time, increase costs and destroy borrower satisfaction.
The result is that they will be less competitive than their peers and run higher non-compliance risk in the current regulatory environment.