Re-evaluating your origination tool? Start here

With the recent drop in new origination volumes, many lenders are using this time to inventory available tools for risk mitigation and workflow optimization. There is also renewed interest in the future state of mortgage originations. This leaves many lenders overwhelmed with options and not understanding when, where and how best to implement new technology.

look inside

Many leading lenders first take the time to review their origination process and then create clear digital transformation goals. Many of these goals lead to additional technologies that can both reduce cycle times and reduce costs. Some solutions are built in-house, but often the key to saving time lies in finding or expanding partnerships.

The lending industry has traditionally taken a cautious and conservative approach to technological evolution, but it turns out that many “strategic” decisions are being made while production is relatively calm. I was. Choosing the right direction at the right time can highlight the difference between simply competing for survival and growing when others don’t.

The pace of change highlights the need for trusted partnerships to adapt and evolve. We have operated in a sector where the lending environment is under great pressure to meet consumers on their financial journey.

According to this recent HousingWire article, some lenders are considering changing their origination channels, including the re-emergence of equity lending via HELOC and Second Loan products. It is on the rise and is about to tap into the $20 trillion of undeveloped stock estimated by the Federal Reserve.

We have also seen large multi-channel lenders reduce the risk footprint of their wholesale and correspondent lending. Predictably, this changes the risk profile across the business. Reliance on like-minded partners or suppliers who can reflect these agile strategic decisions in real time and deliver quality results has become paramount. In fact, this very subtle “competitive agility” can be a differentiator for many organizations.

look out

What about factors other than the origination workshop? Borrower preferences are constantly changing. They want speed, digital interaction and a smooth borrowing experience while prioritizing security and privacy. This doesn’t even include the stringent requirements of regulators and investors.

Choosing the right tools to streamline the transaction from POS to loan closing can create a positive experience for consumers. Emerging technologies such as artificial intelligence and robotic process automation enable seamless speed to market.

With a wealth of existing data on each consumer persona, it is not surprising that many traditional risk mitigation steps can be quickly tracked by knowing consumers better at the time of application. Starting validation and verification early in the process makes it easier for everyone. This will be an important factor in the ever-evolving mortgage landscape.

Looking more closely at property valuations, the pandemic and reduced numbers of qualified valuation professionals have exacerbated many concerns. Some studies suggest that the number of active appraisers is steadily declining by an average of 2.6% per year. Leveraging technology to advance the assessment process by delivering quality assessments of value through automation, desktop, drive-by, and even virtual technology, without sacrificing accuracy or violating consumer security or privacy. Accelerate time to market without As investor guidelines evolve, so must the providers of valuation services and the lenders that use them.

There are additional concerns regarding dealing with the risks posed by natural disasters. Lenders strive to minimize risk while meeting compliance guidelines. This is another opportunity to leverage partners who can assess risks in real time, provide damage assessments, and provide accurate assessments and services when consumers need them most. These are often very difficult or impossible solutions to launch with in-house technology alone. Lenders should start evaluating existing solutions to determine which one best suits their needs and be able to meet future needs.

I’m looking forward to

We would be remiss here if we did not mention the evolving fraud risks, especially attack vectors emanating from outside the transaction and participants. Home fraud has resurfaced to some extent due to the typical misrepresentation of residents, assets and income, while cyber threats from synthetic identities, business email compromise, account takeover and wire fraud at closing have increased significantly. doing.

What we are looking at today is a coordinated attack vector that originates outside the transaction, and indeed many times outside the country. According to the FBI 2021 IC3 report, wire fraud at closing, which utilizes lax security controls to redirect wire transfers prior to loan closing, has reached unprecedented levels. loss. Email account and wire transfer compromises are among the fastest growing fraud threats in mortgages today.

Given all of the internal and external threats, risks, and pitfalls of today’s mortgage originations, what lenders need more than ever is the ability to rely on partnerships that can bridge the current requirements of lending. Accelerate time to market and ensure quality and health while delivering security and innovation through a multi-tool “everywhere-once” presence. Competitive agility in the future state of lending depends on being agile as risks and market pressures evolve. Having a trusted partner help share the load can help reduce the burden of technology without the long-term development chores.

Enabling lenders to look inward, outward and forward is the very foundation of DataVerify DNA. We evolve with our partners to provide the solutions our clients expect, with a firm eye on their future needs they may have. This could mean mitigating risk through MERS, NMLS and watchlist screening. But it can also empower clients to innovate with artificial intelligence, robotic process automation, and wire fraud prevention. Lenders can rely on our agility and resilience regardless of their risk appetite and wherever their strategic direction lies.

More than ever, lenders need to ask providers the hard questions to ensure that solutions are tailored to their needs and not one-size-fits-all tools. Leading and permanent lenders are embarking on digital transformation with clear goals. While some goals have been met with in-house solutions, many companies rely on subject matter experts to provide cost-effective, long-term, strategic solutions.

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