Over the last couple of quarters, we have seen origination volumes go down by quite a bit. Mortgage lenders are rediscovering the broker-wholesale channel as a low-cost way to extend their reach and maintain volumes.
While the retail channel offers lenders the highest gain on sale for their originations, it’s much more expensive to operate because of the costs associated with maintaining a network of physical branches and large payrolls.
Having said that life as a wholesaler is no cakewalk. Their whole business depends on their relationships with brokers, and they can certainly be an unpredictable lot. They have no loyalties to any wholesale lender. As they say, You are only as good as your last loan, so wholesalers need to make sure they have a great service experience, one that’s easy to do business with. Because mortgage brokers will always have other options, it puts the onus on you as a wholesale lender to be able to have a good & easy process, and to have the ability to guarantee the broker that you can close that loan faster than anyone else can.
What pleases brokers & borrowers?
Brokers want to please their borrowers and what pleases borrowers, all other things like interest rates remaining constant.
Brokers do the rate shopping for borrowers, more accessible than bank loan and could get lenders to waive some fees as well. But what really appealsto borrowers the MOST?It is theability to close the home loan in the fastest timeframe possible and to be able to retain the borrower as a client.
As a wholesale lender, what do you do to increase the pull through rate with brokers?
Yes, you got it right!By helping them respond faster and by approving loans faster.Brokers have relationships with multiple wholesale lenders. If there is one thing that brokers do not like, it is lenders who are unnecessarily difficult. Brokers will often complain about lenders who take longer than necessary on certain matters causing delays to all involved. It’s certainly one of the intermediary market’s biggest gripes.
Digitizing the origination process
Digitizing the origination process leveraging technology like OCR can go a long way in speeding up things. Wholesale lenders typically work only with brokersand take completed loan packages and underwrite them. Many Wholesale lenders handle document processing and indexing manually with a huge workforce. Back-office processing is, therefore, time consuming, error-prone, and effort intensive.
Lenders today say that they are fully electronic, but what they are really doing is dealing in scanned documents – they’re sending the docs in PDF form and they’re saying, ‘We’re all electronic.’” Although these lenders still need to make the final leap to become all digital, that doesn’t mean they cannot extract the needed data from the scans they are receiving and create a demarcation point in the process where it becomes entirely data-driven.
It is not required to work with the same scan documents set throughout the entire process. You just need to get data from the documents that has full integrity, and which can be put through a data-driven process.
This is where OCR plays a vital role. Significant opportunity for lenders to automate using OCR, ICR, and NLP technologies.
Resulting benefits of implementing OCR
- Automate the classification and extraction of mortgage documents
- Increased worker productivity by 700%
- Reduced closing document processing times by 67%
- Reduced HUD-1 processing times by 67%
- Reduced human errors on HUD-1 forms
- Ability to re-distributestaff from manual tasks to high-value projects
- Achieved data accuracy rates of 90% or greater
- Increased closing capacity without adding headcount
Companies that process mortgages have a large workload and every potential homeowner wants to get answers quickly. Between people looking to buy, realtors, and anyone else involved, there is a lot of pressure to accurately process these application forms quickly. Manually entering data from these forms takes so long that you often spend extra hours at the end of the day trying to catch up.
With the Visionet OCR Solution, there has never been a faster way to scan and process data from mortgage forms. By using the worlds most advanced OCR engine, our solution delivers valuable ROI faster than anyone in the industry.More you help the broker close, the more he continues to work with you, the beginning of a healthy win-win relationship. Download the white paper now.
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.