Importance of Mortgage Process Outsourcing

Owning a property is the desired prospect for everyone, but the mortgage that comes with it, certainly isn’t. But the unpleasantness of handling the particulars of a mortgage isn’t limited to owners. The company handling the backend processes that makes successful mortgage management also has a lot on its hands. While the idea of doing more of it undoubtedly is welcome for profitability purposes, the additional workload that accompanies it isn’t. 

Mortgage lenders today are facing an uphill battle due to the effects of the COVID-19 pandemic on the realty market. Many borrowers are struggling with their repayment, and adding Federal support to the mix hasn’t made it easy on the mortgage processing front. Your lending agency is likely to be understaffed due to the pandemic’s effects, too, in which case your business won’t be able to manage all of the associated tasks successfully. A market upswing will only worsen matters as there will be more workload and revenue. The solution is to outsource mortgage processing to a competent agency. 

If you’re unsure how a mortgage Business Process Outsourcing (BPO) partner can help you, this guide is for you. It tells you about the various functions Mortgage Process Outsourcing agencies can handle for you and the benefits you get as a result that can aid your business’s success. 

The Mortgage Processing Functions You Can Outsource

Handling all of the associated functions of mortgaging can be cumbersome and prone to errors due to the complexity and scale involved. A mortgage servicer can take over the many administrative tasks that come with a mortgage, including the ones done after closure. 

• Mortgage Underwriting Support

Details about the borrower are crucial for successful lending. However, there are high chances that the necessary details about them are not entered into the relevant documents. This error could be due to overworked staff not able to pay enough attention, miscommunication between the lender and the borrower, technical glitches in the lender’s system, etc. When it goes unnoticed, it can cause problems, especially if there is a default and recovery is necessary. 

When you outsource mortgage loan processing services to an external agency, their experts scrutinize every detail relevant to the function. The underwriting they provide will include all pertinent details about the borrower. They also ensure that every regulation is complied with during the underwriting as they are aware of all applicable ones. Thus, you won’t have to worry about missed entails in your loan underwriting documents. 

• Smart Appraisal Support

The real estate market is a fickle one, with property values changing frequently. What makes it more difficult is the fact that rates in different areas change at different intervals. In this scenario, obtaining and maintaining the correct values of a property is difficult. External mortgage processing services offer appraisal support to solve this issue. 

They use smart analytics and other sophisticated methods to appraise a property accurately. The analytics will also be based on real-time data, with the ability to predict future values of properties. These agencies can send professional appraisers to your desired locations to gather the required data. Further, they can also gather the same from an established network of theirs. Thus, they save you the hassle of hiring such staff by yourself. 

• Consistent Loss Prevention 

Defaulting on mortgage loan payments is, unfortunately, a common reality in today’s economy. When it occurs, it affects lenders, too, besides the borrowers. You need to have some measures in place to weather the effects of bad loans, if not prevent them altogether. One of the ways you can mitigate this situation is through mortgage process outsourcing. 

These companies provide a complete roster of related services, from basic document processing to borrower outreach. They perform the necessary quality checks on the borrower’s end to verify the details mentioned in the underwriting. 

They can even help the lending company set up a QC team that preemptively prevents the disbursal of loans to those likely to turn them bad. When this team’s results and the relevant underwriting don’t match, you know there’s a higher probability of the loan going bad. 

• Title Support

Property titles are one of the key influential factors for the closing of loans. They are used to determine if there were prior claims to it or if there are still issues about it. Such a vital document requires you to be very careful. Or, you can outsource mortgage processing to a competent agency to get the best possible scrutiny for Title documents. 

The outsourcing agency thoroughly analyzes the report that the title company provides to check for errors. The checks include property write-downs, sale information, and the corresponding financial transaction information. Every relevant image gets a close look to ensure that it is in line with the important textual information present in the document. Their other functions include coordination with loan officers and listing agents, collecting pay-off settlements, and title search reports. 

• Easy Mortgage Closing and Post-closing

Perhaps the most difficult part of the mortgaging pipeline after loan approval is the mortgage closing and post-closing functions. A wrongful closure can result in problems for both the lender and the borrower, with the former having to deal with loss culminating from missed payments on any remaining loan amount. 

The problems can be exacerbated by the other issues plaguing the pipeline, such as untimely/incomplete collection of documents, tedious manual data validation, and improper operating procedures that come with no pre-approved checklists. Outsourcing can automate many processes due to the tolls used by the service providers. 

The experts will standardize the data, making it easier to enter into the system. They will have meticulous protocols in place replete with all relevant quality check procedures to ensure that every closure occurs with nothing left to do. They also maintain the same standard of service concerning post-closing procedures. Even regarding foreclosures, their real estate foreclosure data entry services will handle all your requirements. 

The Benefits of Outsourcing Mortgage Processing

Here are the advantages you gain by letting an external agency handle your mortgage processing tasks.

• Improved Loan Approval Times

Delays in loan approvals are one of the key issues that can bring down the reputation of a lending company. You avoid becoming one of them by outsourcing your mortgage processing task, as the relevant functions will be handled without hitches. The lack of errors in documentation and other components of the loan approval process means that loans can be provided quickly to the borrower. 

• Reduced Costs

The number of functions associated with mortgage processing and the many steps involved in each means that the costs associated with them can hurt a lender’s bottom line. That is especially true in a market fraught with tight margins. Outsource mortgage processing, and you won’t have to worry about unnecessary overheads. 

The numerous experts present in the agency give you the cost advantage of economies of scale. If the agency is based out of an emerging economy, then you get the advantage of currency exchange values too. 

• Access to the Latest Tech Tools

It’s the age of information and Big Data, and it has transformed the real estate sector as much as any other. You must have the tools first to extract all pertinent data and then extract valuable information from it. This is only possible with the latest technological tools and qualified individuals who have mastery over their operation. You get these valuable resources when you outsource your mortgage processing requirements. 

• Better Data Security

Enterprise data is a hot property in the cybercrime market, with instances of attacks increasing yearly. Since a mortgage lending company’s priority isn’t data management of the kind that happens in its IT counterpart, you could be left vulnerable to an attempt on your data. 

Mortgage processing outsourcing can keep your data safe from predators as the service provider will have the necessary safety measures in place as a part of their service routine. They can even coordinate with your preferred cloud service provider to ensure that your and your customer’s data is safe and their privacy is maintained. 

• Improved Organizational Efficiency and Productivity

The seamless completion of important real estate mortgaging functions leaves your staff with less workload, enhancing their engagement and improving their productivity. It also gives you more time to focus on your core tasks related to critical business decision-making and implementation. 

This results in the improvement of the company’s overall efficiency. Helping that will be the fact that you won’t be dealing with unwanted customer service-related issues, as all documentation will be in order. 

Conclusion

A dream home or a commercial property is something that most aspire to have. Mortgage lenders are in a position to help them realize that goal with the money they need. And mortgage process outsourcing service providers can lend their support to this cause as well by aiding lenders with all the difficult and vital tasks that keep their business going. It makes scaling your company easy as you know there is a partner by your side that can give you all the support you need in your business’s many aspects with unrelenting accuracy and timeliness.

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