Ashley Sellers: Small to Midsize Lenders Need Automation to Remain Agile in this Market 


PERSON OF THE WEEK: In this current mortgage market, many small to midsize lenders are struggling to survive. As was the case during the previous downturn, many of these lenders will be seeking ways to further automate their processes and reduce the amount of manual labor to process loans.

To learn more about how small to midsize lenders might utilize technology to survive the recent slowdown in loan volume, MortgageOrb recently interviewed Ashley Sellers, sales leader, IES Mortgage, Equifax.

Q: In today’s challenging mortgage environment, why is automation needed to stay competitive?

Sellers: As the mortgage industry continues to evolve to accommodate changes due to rising interest rates, home affordability issues, and layoffs for mortgage professionals, it is adjusting its operational strategies and technology infrastructures. This is especially important for small to midsized mortgage lenders, which need to remain agile and flexible to keep pace with the changing market, regulatory pressures, and borrower preferences – with limited resources and manpower.

Building in better efficiencies with the use of automation can help ease the reduced manpower many lenders are experiencing. Despite the industry changes, consumers are still applying for loans, and expect the process to be efficient and get approvals quickly.

Given the competitive nature of today’s lending landscape, small and mid-sized lenders can benefit from having automated solutions in place to quickly approve loans while minimizing risk efficiently. Implementing tools to help streamline manual time-consuming tasks that are traditionally paper-based, mortgage professionals can create a more successful process for themselves and their borrowers.

Q: What are some efficiencies mortgage lenders can gain from automation?

Sellers: Automation improves mortgage lender’s ability to scale to meet demand and enables them to adapt quickly to fluctuations in the market. The housing and refinancing boom the industry experienced two years ago resulted in lenders increasing staff to meet demand, however, as interest rates rose and application volume waned, idle staff were let go.

Automation eliminates this scenario and enables lenders to ensure that customer expectations are met and experiences are streamlined and efficient.

Despite the reduced staff, consumers continue to demand quick approval and closing times. The lenders that rely on manual loan approval systems will have slower decisioning and processing times, which could cause borrowers to switch to a lender that can move more quickly.

Automation not only facilitates decision-making throughout the process, but it also improves accuracy and compliance. Eliminating the need for employees to manually rekey information reduces the chances for human error and removes the necessity for employees to manually rekey information and pull data from various applications and supporting documents.

Automation reduces the amount of time spent on tedious tasks, reduces the chances of human error, and speeds up the time to close, enabling lenders to operate more efficiently, remain competitive, reduce costs, and increase conversions. 

Q: How can automation be used to attract younger borrowers? 

Sellers: Millennials and Gen Z consumers, who make up a large part of the market purchasing homes today, are opting for a frictionless mortgage experience, which is provided through automation. This generation is also looking for personalized services, which can be provided by lenders who embrace automation. 

The traditional mortgage process can be burdensome to consumers who prefer digital processes. The number of documents traditionally required for borrowers to provide can be daunting, however, automation enables things like employment verification, W2 forms and other data sets to be automated, streamlining the process. This decreased reliance on manual processes equals reduced stress for borrowers over gathering paperwork, finding lost paperwork, and contacting HR, the bank, and previous employers for documentation. 

Automation also gives the millions of Americans who have thin or no credit files an opportunity to purchase a home. Traditional lending decisions put these individuals at risk of being denied loans, regardless of their actual ability to pay. With the availability and automation of various data sets, a more complete picture of a borrower’s financial situation can be presented. 

Q: How can automation help reduce risk?

Sellers: Technology to automate the labor-intensive aspects of the mortgage process also helps reduce risk for mortgage lenders by flagging potential fraudulent documents and information, as well as potential areas that need further evaluation or review, which are all instrumental in determining loan affordability while reducing risk for lenders. 

In addition, consumer-provided documents and permissioned data can bring risks and challenges. Having applicants provide these documents increases consumer friction, especially if they must personally track them down. Automating these processes eliminates the possibility of fraudulent documents and information being shared by the borrower, such as over-inflated stated borrower income and fraudulent W2 forms. 

Automation also enables built-in decisioning criteria, which creates an environment where every loan decision is seamlessly backed by data, potentially reducing cost, labor, errors, and oversights. Integrating automation and decreasing reliance on paper-based processes enables a more confident lending experience for mortgage professionals and reduces default rates on loans.

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