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Automating Mortgage Processing with ECM Yields a Big Payoff

Posted at March 7, 2014 | By : | Categories : Blog | 0 Comment

Mortgage processing is a document-intensive process that benefits greatly from Enterprise Content Management (ECM) b2ap3_thumbnail_shutterstock_71413129.jpgautomation. Storing and routing documents in electronic form provides an order-of-magnitude greater efficiency, particularly when replacing processes that are based on the handling of paper and fax documents.

The entire mortgage process can be streamlined through ECM automation, from loan application to approval, terms preparation, closing/signing, ongoing account management, and reassigning mortgages to third parties.  Automation replaces all the inefficient manual steps of the mortgage process with more efficient electronic document capture, file storage, and workflow.

ECM automation improves mortgage processing by enabling quicker aggregation of documents, faster approvals, speedier account preparation, quicker access to customer files, and more efficient use of labor to process the loan. Financial benefits include lower processing costs, greater productivity, speedier time to market, and greater customer satisfaction gained from better customer service.

Mortgage processing typically involves from 100 to 200 document types, large teams of workers, and multiple steps. A large amount of information must be collected, stored, reviewed, approved, and managed.

Workflow streamlines these processes and enables multiple workers to perform multiple tasks simultaneously, including gathering and preparing the multitude of forms involved—credit statements, home assessment, employment history, pay stubs, tax forms, insurance forms, rate terms, payment schedule, consent forms, etc.

Savings also are gained by replacing paper documents and file cabinets with electronic file storage, which reduces storage space, search-and-retrieval costs, and eliminates lost and misfiled documents.

Automating the mortgage process with ECM technology enables financial providers to eliminate waste and gain efficiencies in numerous ways, including:

• Eliminate document bottlenecks

• Eliminate lost documents and folders

• Eliminate data-entry error via electronic data capture and forms

• Easily search, find, and process documents

• Process more mortgage accounts with the same staff

• Streamline the loan approval process

• Significantly reduce the cost of mortgage processing with quick payback

• Achieve efficiencies of electronic workflow

• Ease the sorting and packaging of information for different parties and purposes

Security, disaster recovery, and compliance benefits also are gained, as well as an audit trail for monitoring the status of operations. The ability to monitor and revise the workflow steps enables further refinement and improvement of the entire process.

Further efficiencies can be gained, and keying-in errors eliminated, by having customers and agents fill in electronic forms as part of the process. As we have seen, mobile solutions from leading ECM vendors are enabling document capture and input from the field, further improving the mortgage application, approval, and account creation process.

Automating Document Collections

A common practice in the mortgage industry is to sell and reassign mortgages to other financial institutions.  Different institutions specify that you submit different sets of mortgage documents in different orders and file formats for consideration. Collecting, sorting, reformatting, and packaging different sets of documents manually can be work and time intensive. By automating the process, the packaging of document sets for particular institutions can be pre-programmed into the ECM system to enable you to collect, sort, format, and package the document sets automatically. This improves efficiency while saving time, labor, and cost.

Different regulatory agencies also may request different sets of document in different orders, groupings, and formats. The collection and packaging of document sets for audit or compliance purposes may be automated in the same way.

Financially Sound Investment

The productivity and financial benefits of automating the processing of mortgages with ECM technology are well-proven through numerous deployments and case histories. Return on investment is generally achieved within 12 to 18 months and as quickly as six months.

Studies by Forrester Research, Price Waterhouse, Aberdeen Group, IBM, PayStream Advisors, and many others show that ECM technologies and document imaging have a strong business case and return on investment. Forrester Research reported that document imaging (enterprise content management) represents “a low-risk, high-value investment that can be extended through an enterprise,” adding that the ROI can be rapid, with some companies realizing benefits within a few months.

Indeed, we have automated the mortgage processing for financial clients who have successfully streamlined their operations and achieved the desired cost and productivity benefits. These clients, pleased with the results of their mortgage automation systems, have extended ECM technology to other areas of their business, including customer onboarding, accounts payable, back-office processing, and other invoicing operations.

Extending ECM to Other Departments

Our experience is in line with the findings of analyst surveys that show that significant financial and process-improvement advantages are gained by automating document processes with ECM technology. Aberdeen Group, which regularly examines this topic, finds that ECM automation of invoicing operations with document capture, electronic storage, and workflow elevates organizations to a “leaders” category that separates them from “laggards” who fail to automate, and gives those who automate a dramatic cost-of-operations and competitive advantage.

The benefits of automating, mortgage, invoice, sales order, and other business processes are essentially the same. The mortgage approval process alone can benefit substantially from ECM automation. As PayStream Advisors notes, “Skeptics may still doubt the ROI of automated approval workflow, but it is getting harder to defend that position in the face of the facts.”

PayStream Advisors’s latest survey of ECM automation and workflow found that the number-one benefit of invoice approval workflow was the quicker approval times (achieved by 76 percent of those surveyed), while one-half of those surveyed were able to increase employee productivity, and nearly 60% reported lower processing costs.

Integrating ECM with Line-of-Business Applications

Aberdeen Group recommends that organizations continue to accrue benefits by following a comprehensive automation strategy to add more business-process automation capabilities and integrate their ECM systems with installed line-of-business systems.

Banks and other financial organizations, for example, can derive benefits from integrating their ECM systems with their core banking and customer service systems. Requests from customers for details of their mortgage and other financial records can be settled more quickly and easily when the records are easily accessible.  Having information at your fingertips and being able to call up a customer’s record with a keystroke eliminates long and costly file cabinet searches and frustrating customer waiting time.

Likewise, making mortgage information available to internal financial planners and business analysts enables them to make better decisions and projections based on easily accessible real-time information.

Any judicious examination will show that the overall business case for automating mortgage processing with ECM technology is exceptionally strong.  This is particularly true for manual paper-based processes. As Forrester Research reports, for those companies that stubbornly cling to the status quo of manual document processing, the result will be “increasing costs to manage paper processes, inability to offer Web-based self-servicing, and difficulty providing comparative levels of service with others that have digitized records.”

Argent goes further, warning companies that are experiencing the mounting pressure to increase their business’s efficiency, shave expenses, and enhance customer service that it’s “automate or die.”

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