In the past few quarters, the higher interest rates have led to a decline in purchase and refinance volumes. As a strategy to offset the origination risk, several origination companies often decide to own a partial servicing portfolio as well. Of course apart from this, there are the pureplay mortgage servicers, who have been specializing in this area for several years.
On-boarding loans getting expensive
Servicers usually on-board loan portfolios from originators. To ensure minimal risk, they perform full portfolio QC to ensure that there are no bad loans in the portfolio. This can be a time-consuming process and can get very expensive. Processing such large volume of loans can tend to be an arduous task.
Ways, Servicers can reduce cost of portfolio reviews by over 45%
So, what are ways, servicers can reduce their cost of portfolio reviews. We talk through some of the options:
1. Bulk Processing:
Servicers buy loan portfolios in bulk from originators. If the entire portfolio can be indexed and stacked, ready for a pre-purchase review, this will save significant amount of time for the servicer. This is possible using the right OCR based technologies. AI based OCR tools can speed up the bulk processing, document uploads become faster, and hence the whole process of review is done way faster than normal. This saves time and cost too. Servicers should avail such technologies to ensure that they are able to process the loans in bulk.
2. Using a Pay as you Go model:
If you are in the process of evaluating a technology that can help you through the entire review process, then consider deploying technologies using the pay-as-you-go model. This ensures that that there is no upfront cost involved in acquiring the technology and yet, you can start using the technology and drive business benefits from day one. Also, since the technology is already in use, it already factors in the relevant domain knowledge and you benefit significantly as there is no development time involved.
3. Using a Configurable QC tool:
To ensure minimal risk, servicers and correspondents perform full portfolio QC to ensure that there are no bad loans in the portfolio. A full portfolio QC can be time-consuming. But if you were to define the parameters on which QC needs to be performed, define the exceptions and especially when the tool is web based and entirely configurable, the entire QC process can be a lot easier to manage. The biggest advantage of this digital QC platform is that it can be easily rolled out enterprise wide. This approach can be greatly cost efficient.
4. Get things right, the first time:
If you can get a good level of accuracy through your technology investments, then you will avoid rework and reduce the related risks,on top of that you will be able to get things done faster. For servicers, rework comes at the cost of long hours, and money too. Utilizing technology here can not only ensure accuracy, but also make things work faster.
Visionet Systems, offers several of these possibilities through its VisiLoanReview platform. From bulk processing using OCR to ensuring an organization wide configurable QC platform, it has the answers servicers seek to reduce their cost of portfolio reviews by over 45%.
As a part of its engagements, Visionet also provides a digital dashboard which helps the customer track their different metrics like loans indexed, extracted and QC reviews on their mobile phone. This level of reporting has proved very useful for several of its clients.
Visionet also offers you the possibility, where you can evaluate their OCR tool, without any costs. Go ahead and submit your files. Visionet team will revert back within 4-6 working hours
Alok Bansal is Managing Director of Visionet Systems Inc. and has 21 years of experience in managing strategy and global BPO operations. He excels in optimizing and leading the growth of financial services companies who are looking to take their mortgage operations to the next level.