Mortgage Processing
Mortgage processing is the procedure by which a lender evaluates and approves a borrower’s request for a mortgage loan. To assess the borrower’s creditworthiness, property value, and other risk factors, the process involves gathering and verifying information about the borrower’s financial status, property details, and other relevant specifics. The mortgage processing typically involves the participation of the borrower, lender, real estate agent, appraiser, and title company, and can take weeks or even months to complete.
Importance of accuracy in mortgage processing
Since mortgage processing is a complex process, ensuring accuracy at each step of mortgage processing is very important. Mortgage processing, being a data-intensive procedure, is frequently prone to errors, which may include inaccurate mortgage loan application, errors in applicant’s contact information, incorrect escrow analysis etc. If a single step of mortgage processing is inaccurate, the entire process may lead to wrong results and wrong approval decisions.
Usually, the time taken for mortgage processing to complete might range from few weeks to even months, and applicants need to wait patiently until the entire process is completed. If any errors occur during the processing, the time duration again increases which would give a negative impression to the applicant and increases the chances of applicant withdrawing the mortgage loan application. Applicants will slowly loose interest if the mortgage processing is delayed for a longer period along with a lot of processing errors.
Some of the major challenges that affect the accuracy of mortgage processing are:
1. Inaccurate documentation
Documentation plays a major role in mortgage processing and any inappropriate or missing documents might lead to errors and delay in processing.
2. Human error
The mortgage processing involves many stages where data entry is required, hence the risk of human error is high. Even a minute mistake might lead to serious consequences.
3. Ineffective communication
Since mortgage processing involves communication among multiple parties such as lender, underwriter, real estate agents etc. Any misunderstanding can result in processing errors.
4. Compliance problems
The lenders must comply with various regulations imposed by state government to proceed with certain processes. Failure of compliance might also cause delay and inaccuracy in processing.
5. Technical problems
If mortgage processing is done using any software technology, there are chances that any software glitch or system failures might cause inaccuracy in processing.
Tips for Achieving High-Quality Output
1. Error-Free Documentation
The major part of mortgage processing includes documentation and hence, the need for the appropriate documents is crucial. The applicant must be informed about the required documents way before the processing begins, so that he/she can collect the documents, verify and submit it at the right time. Right documents when submitted at the right time can reduce the processing errors to a large extent.
2. Evaluation of Loan File and Credit Report
The loan processor needs to assess each document with utmost attention and ensure that the information provided by the applicant is accurate. The applicant must also have received a pre-approval letter before the processing starts. Applicant’s credit report must also be thoroughly verified to ensure that the applicant will be able to repay the loan amount.
3. Compliance Audit
Carrying out a compliance audit by cross-checking with the correct compliance guidelines proposed for the respective loan type can help to identify and resolve any compliance or legal issues before it causes serious consequences.
4. Focus on Minute Details
Overlooking small details during the mortgage processing might lead to severe errors which could be difficult to solve later. Hence, it is very important to pay attention to each and every small detail to ensure that the entire process is error-free.
5. Triage Process
The usage of triage process is very helpful to improve accuracy of mortgage processing. This process involves a rule-based engine to transfer the complicated loan applications to experienced underwriters and the less-complicated ones to the less experienced underwriters. This process can reduce delays and inaccuracies up to a great extent.
6. Quality Control Reviews
It is very important to conduct sample reviews throughout the mortgage processing to ensure that each and every step is accurate. Verifying the data carefully through these quality control reviews can help a lot to identify and rectify mistakes before the final closing stage.
7. Use of Latest Technology
Relying on an experienced mortgage processing team that is ready with latest software and best IT practices ensures error-free processing and helps to avoid any technical glitches.
8. Experienced Mortgage Professionals
Associating with talented and well-experienced mortgage processing professionals can make the entire mortgage processing accurate and fast. Since experienced people are already aware of the common errors as well as the best practices, there will be a smooth flow in the mortgage processing.
9. Mortgage Process Outsourcing
Outsourcing of mortgage process to expert companies like Auctor Business Solutions can help applicants stay worry-free about the accuracy of the processing. The well-trained specialist mortgage professionals will ensure that each and every step of mortgage process is accurate.
