Transparency in Mortgage Lending: Software Capabilities Define Your Potential

Economy runs on the ability of banks to finance individuals and companies in a profitable way. Banks have the prerogative to calculate a gamut of things before saying yes to people. It’s always about numbers, but modern technology has given loan officers the power to customize and help people they couldn’t have earlier.

When someone applies for a loan in dire need, origination officers can use a mobile phone to check cloud data related to the person. That data, which includes credit reports, spending patterns, legal records, education scores, employment history and more, lets the bank management decide which loans will suit different individuals. That is the fundamental approach to offering customized mortgages.

With technology reaching for the heights of connectivity, banks are looking at the horizon of ideal underwriting. Most of it is now automated and the related tasks should become more streamlined as we move ahead. While banks will have complete transparency about the borrowers’ repayment capabilities, the customers need to see transparency as well. Borrowers are worried about whether they will get the loan, how long it will take, and if other banks will be ready to lend. The technology to enable transparency, on both sides, must include apps which are cross platform and device agnostic.

To use the potential of cloud, such a technology only makes sense. Small and midsize banks can do much better by letting go of server maintenance costs. However, in the finance industry, there already exists the protocol of storing some data in-house for security reasons. Although there is easy access to encryption software to protect files stored on cloud, banks select a part of their database to be stored on premise. Such a protocol can be expensive for some banks and the need to cut other costs becomes strong.

loan origination software

The process of any loan origination software product is based on enabling a direct-to-consumer approach. It lets the bank cut costs of paper, agency service, and underwriting. These were major components contributing to cost per loan. Such a problem is only inflated when banks want to scale. Reaching more consumers without extra cost is possible if you give them a cloud-based app, which can let them check for customized options, calculate the eligibility, and get a feedback on the same within days. The timeline stipulation is also a mandate according to the latest financial guidelines.

When a customer goes online to apply for a loan, it helps banks to improve their customer service. They can introduce customers to loans they are eligible for based on automated analytics. Once they tap on a preference, the formal underwriting process can be automated. In the case of an exception or the borrower preferring a human interaction, the technology can provide the customer a video interactive feature or supply the relevant documents.

Technological growth in the lending sector is one of the things to look forward to. Customer service can be improved and scaled easily with the latest systems using cloud and automated machine learning. The concept of allowing machines to determine the best products for a customer holds water when the operations are data intensive and based on real-time information.

The kind of software that will rule the lending sector is similar to what we see in major manufacturing and retail companies. The customer preferences are studies across a vast range of data sets and they are used by machines to determine the best strategies. Their outcomes can be determined even if you wanted to check how each strategy will play out with some parameters changed.

Post Author: Jennifer Slegg

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