The secret to underwriting more loans with less work

By: Luis Blanco, Vice President, Product Management and Strategy, ICE Mortgage Technology

Addressing the scalability challenge

Over the last year, just about every lender experienced scalability constraints that impacted both team productivity and the borrower experience. Concurrently, however, advances in automated underwriting technology have provided ways for lenders to improve their processes and manage their margins…better than ever. This is especially important since underwriting still retains the highest portion of the cost to originate. During our recent Experience 2021 conference, I sat down with Dan Catinella, Chief Digital Officer at Finance of America Mortgage, and Kevin Peranio, Chief Lending Officer at Paramount Residential Mortgage Group, to discuss how they are expanding capacity and scalability in the underwriting space.

The democratization of underwriting

Underwriters spend a lot of time on disjointed and error-prone manual tasks, costing organizations hundreds of dollars per loan in margin. What’s really needed is a democratization of the entire underwriting process. So, what does that mean? Rather than being locked into legacy processes with limited options, lenders can utilize digital mortgage technology to choose where key underwriting tasks are completed. This flexibility allows lenders to move away from traditional “linear” processes toward exception-based processes. As a result, automation technology quickly and efficiently takes care of repetitive and previously manual tasks, so underwriters can spend their time and expertise on more complex situations and loan decisions.

The results of improved scalability

During our conversation, Dan Catinella shared how turn times (the number of days it takes for a loan to be manufactured in the mortgage process) were a primary challenge for virtually every lender over the past year. And, with only so many skilled underwriters available, there is now a need for exception-based solutions and processes that allow organizations to move quicker and scale more effectively. By implementing AIQ™ automation technology, Finance of America was able to improve scalability, enable junior underwriters to take on more responsibility, and free senior-level staff to focus on more complex issues.

Similarly, Kevin Peranio shared how Paramount Residential Mortgage Group (PRMG) is working to dramatically reduce its underwriting cost through automation. He stated PRMG’s goal of dropping these costs to $100 per loan, and how automated intelligence is a big part of achieving such. For instance, automation has allowed their skilled labor to focus on important exceptions, rather than be bogged down by every single loan.

Risk management through automation

Using mortgage automation technology, lenders can create a systematic process that saves time and significantly reduces errors. In fact, during Finance of America’s automation pilot program, they found that manual processes created more risk and errors than those managed through automation. Even with these benefits, moving to an automated underwriting solution and getting your team on board can be daunting.

So, how do you achieve buy-in? Get the team comfortable with the technology through a proof of concept program, and by collecting data around actual results and improvements. By doing so, you’ll most likely find that even your staunchest detractors will become converts when they realize the benefits. You can further boost the confidence of your risk management team by ensuring that your intelligent automation solution standardizes the way new processes are handled, which alleviates the risk of doing things manually. Only with high-quality and reliable data can the benefits of intelligent automation be fully realized.

AIQ™ by ICE Mortgage Technology

Intelligent automation technology is essential to enabling lenders to scale with changing market conditions. Lenders that invest in this technology through proper change management planning and adoption will see greater ROI. AIQ™ by ICE Mortgage Technology has helped lenders across the industry overcome scalability constraints, reduce risk, and process more loans with less work. Click below to learn more about this powerful mortgage automation solution.

Learn more about AIQ by ICE Mortgage Technology

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