Banking Financial Services Mortgage Technology

Will Automation Of Mortgage Processes Help Counter The Market Slowdown? Let’s Find Out

In business, there are always ups and downs. The key is to try and minimize the downs and make the most of the ups. But what do you do when you’re in a down? Automation can help you operate with lower resources and scale easily when required. So if you’ve been thinking about automating your mortgage business, now is the time to do it. Here’s why:

1. Lower Stakes:

As mentioned, one of the benefits of automating during a downturn is that the stakes are lower. You’re not as worried about making a mistake because you’re already not doing as well as you’d like. This means that you can afford to take more risks and experiment with new things. If it doesn’t work out, no big deal. But if it does, then you’ve found a way to improve your business during a down period.

2. Fewer Resources:

Another benefit of automating during a downturn is that you have fewer resources to work with. This can actually be an advantage because it forces you to be more efficient with your resources. When you automate, you can often do more with less. This can help you save money and become more lean and agile as a business.
The fire and hire policy practiced during a slow market is a very short-sighted approach. Many leaders ignore the cost of rehiring employees during the growth phase.
Did you know that the cost to lay off and rehire a Loan Officer is approximately $27,300
Multiply this figure with the number of loan officers you may need to hire when the demand increases and you find yourself staring at a fat deficit. The hiring process is also time exhaustive and slows the growth of the enterprise when the market is picking up.

3. Easier to Scale:

Finally, automating during a downturn can also make it easier to scale your business when things turn around. Because you’ve already automated many of your processes, it will be easier to add new customers and grow your business quickly when demand increases again. If you wait until things are good again to automate, then you’ll have to start from scratch and it will be much harder to scale quickly.
A Freddie Mac study found that the average cost to initiate a mortgage for retail-only lenders is more than $8,500 per loan. That cost increases considerably for less efficient lenders.
But Lenders who automate operate at 2200 $ less per loan, than those who don’t.
Automation can help you save time and money, especially for mortgage lenders. For example, let’s say you’re a loan officer who originates an average of 30 loans per month. If it takes you an hour to originate each loan, that’s 30 hours per month—or 360 hours per year—that you’re spending on loan origination alone. But what if there was a way to reduce that time and double the loans processed per month? That’s where automation comes in.
With automation, you can save time on repetitive tasks so that you can focus on more important things—like originating more loans! In fact, some loan officers have been able to increase their loan volume by as much as 400% simply by automating their workflow.

4. Better Compliance:

Not only does automation save your staff time, but it also helps to improve accuracy and consistency. For example, let’s say you’re manually verifying borrower eligibility. If even one person makes a mistake, it could result in an ineligible borrower slipping through the cracks. But if you’re using an automated system, that mistake is less likely to happen—and if it does happen, it’ll be much easier to identify and correct.
Verification and underwriting processes are the core functions of the mortgage process. By automation of these repetitive processes’ lenders can avoid costly compliance penalties. The enterprise can eliminate human error and ensure that every loan file is complete and compliant before it moves on to the next stage of the process. Better customer experience will have a direct positive impact on the brand image and hence on the overall growth of the lending firm.
Click here to read how can avoid getting overwhelmed by automation.
Automating during a downturn has many advantages, including lower stakes, fewer resources, and easier scalability. So if you’ve been thinking about automating your mortgage business, now is the time to do it!


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