Automation & technology

What’s driving lenders to make the change to automation?


From the series:
Culture of automation

What’s driving lenders to make the change to automation?  Survival.

We’re experiencing an historic shift in the mortgage lending market on the heels of an unprecedented refi boom, a high-demand real estate market, and a greater-than-ever need for efficiency.  In episode 2 of our “Culture of Automation” mini-series, Amy Cross, Principal Project Manager at ICE Mortgage Technology covers: 

  • What’s prompting lenders to adopt a culture of automation
  • Why automation is a critical element to long-term survival
  • Which processes lenders are automating first
  • What end-to-end automation really looks like

Taking just 16 minutes to hear from Amy now is a big step in the right direction on your path to automation.

Welcome to our open house. Instead of examining hardwood floors, closet space, and kitchen layouts, we're taking you on a tour of what's happening across today's mortgage industry. During each episode, we'll hear from industry leaders and subject matter experts to give us an inside look into a hot topic, cutting edge technology, or new trend that can help accelerate your digital journey. Thank you for joining us. Come on in.

Hello and welcome to another episode of the Ice Mortgage Technology Open House Podcast. My name is Aaron Dormio, Senior Product Marketing Manager here at Ice Mortgage Technology, and I'm excited for our second episode in our Culture of Automation miniseries. Throughout these six episodes, we'll be talking to various guest speakers from Encompass customers to industry experts about their journey to automation, including what led them to automating their mortgage processes, the cultural impact internally, as well as the impact automation has had on their.

Business and borrower experience overall in this episode, what's driving lenders to make the change to automation? I'm joined by Amy Cross, Principal Product Manager here at Ice Mortgage Technology. As one of the leading product managers for the Encompass platform, Amy is an integral part of product development and planning as well as go to market. She's been directly involved in some of the biggest industry transformations over the past 20 years, including Trid, Erla and others. I'm eager to get her perspective on the key fact.

That Dr. lenders to make the change to automation. So sit back, relax and enjoy the conversation. Hey Amy, thanks for joining me today. Good. Sierra, you as well, you as well in looking at your background, you've got such a wealth of experience not just within mortgage technology but all across the mortgage industry itself. And so I think you are uniquely positioned to have this conversation with me today. I'll just get right into it from your perspective and in your experience understanding that automation me frankly we talk about it all the time, nothing new.

To the mortgage industry and especially within mortgage technology, I'd love to get your insights into really why are lenders today adopting automation? What's driving them to adopt automation within their business processes? Yeah, it's a great question. Automation around business processes, particularly in the mortgage industry, that's nothing new. That's something that's been kind of fundamental to the industry. And we've been, you know, working towards these goals for many, many years. My entire career has been spent, I'm working on automating things from your originations through correspondent.

Lending business process outsourcing and other things as well. I mean currently the current trends in the market you're driven a lot by things like COVID, the pandemic, the need to you know support people working from home. The of course we've got labor issues and things like that. So we've got sensitivity around time to market, time to closing cost of these processes, your customer experience. So all of those factors are going to drive really wanting to drive more and more automation into into your.

Processes. I think one of the things and again we talk about this a lot is automation is just it's no longer that nice to have sort of thing. It's become increasingly critical to really longterm survival within the mortgage industry. I I'd love to hear your insights on where the industry has has come from, where lenders are kind of moving toward and perhaps you know some key inside fastball insights that you might have on, you know why is this becoming so critical.

There's always pressure on having the right resources at the right time, doing the right thing. So you want to make sure that you know as much as possible, especially with your resources like underwriters, they're your your highest paid resources in a lot of cases there and and having them really focused in on things that they need to be doing and not on your manual tasks, clerical tasks, things that a bot or something else could actually easily do for them, that that's incredibly critical to being able.

To keeping your turn times down, allowing loans to close faster and really driving those things that you know genuinely drive your bottom line and even more importantly your borrower experience, you know you want to have the best experience you can for that borrower. So they're going to continue to come back. So it's not just a one time thing, it's an ongoing relationship building thing. And I think the key things that borrower experience these organizations, they can automate previously manual processes, but if the impact isn't seen in the if the if the ROI in the value is it really.

Seen from the lens of how the borrower experience has been improved and it's it's kind of offered nothing, right. I would love to kind of transition into what from from your perspective, what are those types of automations that not only help to create efficiencies within the mortgage companies themselves, but really a seen true value from the borrower's perspective, sure. So I mean there's.

And generically when you start thinking about like what are the types of things they're doing. So a lot of our clients are, you know, investigating things like robotic Process automation, so automating those clicks, getting that out of the hands of users into the hands of those those old bots who can take care of the busy work for you. And obviously we've got a lot of clients who are also moving away from those traditional SDK apps that they've been building for a long time and and moving, moving toward, you know, more modern frameworks, moving to the cloud using REST API's.

Automating processes in that way, automating their provisioning, automating handling documents, responding to events. A really classic example of something where there's a ton of work being done in terms of the automation and the borrower experience. That's always comes up when you when you talk about the mortgage industry and the borrower experience itself is processing and handling of the borrower's documents. There are a lot of different ways to crack that saying OK, first of all, figuring out what documents to ask for and then to, you know.

Communicating to the borrower, letting them know that your documents are here, we've got them. We're responding to what's happening with my loan where before you know, traditionally we've come you know light years ahead of where we were, you know 10-15 years ago where you know what I I'm, I'm as a borrower going in and submitting my documents multiple times because I don't know, I don't, I don't see the mortgage company has received them or is taking any action on them. What's happening?

So really having that focus around, you know, the document processing, the automation that's, that's around that. So the document recognition, classification, associating that into conditions, there's just so much there that can really can and does really improve the borrower experience for for him getting their loan originated. That's right. I mean and a lot of times that could be the biggest hiccup, right, that's holding up the entire process. I just bought a house a year ago.

And the experience that I had a few years prior, I know is kind of a shortened timeframe, but the rates were great. We wanted a house with a basement. So we went ahead and we made the move. I can remember the process several years ago being it seemed like it was a lot more fluid and a lot more just straightforward there. There wasn't so much of A hang up on the way that we were.

Docu signing documents, the number of times that they asked us for the same documents like you said. So from the borrower's perspective, I can almost tell now that I'm much more knowledgeable about mortgage technology automation. I can, I can now look back and go, Oh yeah, I can tell automatically what sort of processes they had in place. Perhaps that wasn't really automated this time around, you know. So I think when it comes to end to end automation, from your perspective, what does it look like when it's done right, The easy thing to say, but.

When it's done right, your operations users or your people in your back office are going to be working exceptions. They're not going to be working and doing manual work on every operation on every file. They're going to be doing exceptions. They're going to be doing sampling.

You're going to have much more streamlined straight through processing for the for the easy stuff that can just go through. So you're going to see that's going to look like having shortened closing times, shortened delivery times, less time on your warehouse line, right. That's the, that's the Holy Grail that everybody wants in the mortgage industry because that again directly impacts your profitability, the pastor you can pose those loans the more times you could turn that warehouse line that it, that results in higher profits, so lower costs, higher volume without increasing your resources and that's what we're always looking to do.

That's a great point in that that makes me want to double click into what we talked about prior as far as business processes. From your perspective, what sort of feedback would you say that we continuously get from customers regarding their need to make that shift to automation to more automated processes perhaps even end to end if they've if they thought it through to that to that extent, sure. I mean that results like so when I talk about they're migrating to API's. So one of my jobs is encompassed by manager is.

I'm also a manager of Developer Connect and our platform. And so we get a lot of requests or in it for a lot of API support in these different areas. So for things like allowing lenders to get rid of their disclosure desks and automate processes around service ordering, fee ordering things to allow them safely generate their initial and revised disclosures. So management of change in circumstance, condition management, we're just talking about that in terms of the documents, managing all of that, the receipt, the extraction.

And you know, kind of the next, next step and things we're looking at here, that's what can we do to automate income calculation like start to apply, you know, apply some some machine learning, some artificial intelligence against the data that gets extracted from those documents and really take that and turn that into something very usable and value added for the underwriters so that they don't necessarily have to spend as much time, let's go create a spreadsheet so I could show my work, so I could do So a lot of that can be done for them, so they can have be presented.

With a package of here is what this may look like and this is what you could use. Review this file. You know approve a decision that counter it. Do what do what you need to do as an underwriter as opposed to going in and doing some doing the arithmetic.

Exactly, exactly. Going going back to what you said about document management, that's a really important top of mind area right now, not only for the industry but for our customers, right. That's one thing that they're they're talking about, that's one thing that we've we've been hearing live with customers. I'd love for you to maybe talk about some of those the integrations that we're seeing across not just Encompass, right, not just around ICE mortgage technology, but what we're seeing within the industry in terms of document management and how that's creating greater efficiency.

Internally. So when we start talking about you know document management it's there's there's a lot of different topics that that could cover. I mean we're we're talking about you know automation in terms of what's required from a retail perspective, right, what do I, what's my interaction with the borrower. But there is also extensions when we start talking about the delivery of the file, the investors who are you know reviewing those files for purchase and how do I most effectively communicate with my sellers who are who are.

Selling me those loans, so I mean there and and also then how can I also receive those documents, the data that goes along with them. So again kind of driving in that end to end from manufacture all the way through secondary marketing really taking those loan files. And again to your point, you know this can start in one platform, move through another and move through another to get through end to end. But you need to make sure that those that that manufacturing process is intact all the way through that you're avoiding, you know avoiding.

Transformations where you don't need to do it so that you're keeping your data, you know, intact and clean and then it's all, you know, lining up with your documents so that you have a file that's very quickly and easily purchasable. Because everything we're talking about, you know, the investors are doing this automation too. They want to be able to analyze the quality of those files. They want to make sure that they're, you know, accurate and that they can service them, that they know that they're not going to be going into foreclosure. All of those different things that are that are going to be brought to bear. So there's a ton of technology.

Being applied and run against these LUM files. Now, admittedly I'm in no way an expert on how this technology is built. From my perspective, I understand the application of it, but it sounds to me like without the.

Number one, without the right business partner, #2 without the right technology in place, and #3 without the without understanding the business processes that need to be automated on the business side, without all all three of those working and fine harmony, this this could actually be more detrimental than than help. Absolutely. There's there's an old saying about that. It says that the only thing worse than a manual process is a badly automated 1.

Because if you think about it, think about you know something where you've got a ton of volume and not using anybody any any names. Just saying that you know maybe the originator has, you know they're doing thousands of loans a month and if you do something wrong in your automation and you, you could potentially impact thousands of loans and it doesn't take much for many of those to to run you into some serious business problems.

So this has to be when you're when you're automating processes, you need to do it with all due diligence. I'll do caution, I'll do respect for it and rigor to it. It can be done, it can be done really well with incredible quality, but it has to be done knowingly and deliberately. I think. I think now we're kind of going into a whole different.

Realm of not only how to automate, but more of the change management side of this, of this process, which is consequently a further episode down in our podcast series. So for those customers that are listening, for those, those mortgage companies, those lenders, they're listening in on this and they're still sitting there saying OK, this, this sounds fantastic, but you know, geez, I'm really still unsure about how to get started. I'm still unsure about what's I kind of have an idea, right, of what's driving me to make this change.

It's never too late, right? But don't really know what are these common manually performed operational tasks in my business that are commonly sought after as being, hey, this is right for automation, I don't know why we haven't automated this process yet.

From your perspective, where might these companies look toward And then we kind of covered them, but I kind of wanted to do a quick recap of that for the for our listeners. So again we talked about that you know a little bit, again like disclosure desks that was something that that that cropped up and there's a lot, there were a lot of processes around that. You know, post frit, I mean I think that's an area certainly that a lot of companies are looking at like OK, can I phase this out? What can I do around this? So there's a lot that can happen to support your migration away from that. So you're looking at automated.

Your service ordering, automating your including you know, ordering of your fee estimates, automating generation of those initial disclosures, managing your change in circumstance, all of those things can factor into really having a good automation program around you know retiring your disclosure desk. And I know that that's certainly something that a lot of our clients.

Have either already done or and are looking to do that kind of makes me think of now that they've taken a look at what internally they can automate and they're sort of making that determination of you know where do we go from here. I would love your perspective on what would be that next step in terms of selecting the right business partner, selecting the right technology. From your perspective of understanding the whole mortgage landscape as a whole, knowing the technologies that are out there, what might be some of your recommendations and suggestions in terms of making that?

Selection of that of that business partner because not all, not all business partners in mortgage technology companies as we know they're not all built the same. They don't all offer the same thing and they don't all deliver the same level service. Some are great, they're fantastic at one thing, but they can't really manage the full scope. So what are some of the recommendations that you might have as a way to go from here? One thing I can say for sure in terms of picking business partners, probably one of the best ways is you know work with your peers. We know many of our clients and most of them.

They talk, they talk to each other. You know who your peers are, who you work with and working groups have those conversations. You know, yeah, I see you does roll this out. Would you work with to do that? You know, you can get, you know, word of mouth can be a huge help in terms of picking out partners. Exactly. That's that's great advice.

Well, Amy, I think that's all the time we have for this episode. Again, thank you so much for making the time. I know your your breath of experience is is really well positioned to have this conversation and it's always great to talk to you. Thanks a lot, Amy. Thank you. Have a good day. Thanks again for joining another episode of the Ice Mortgage Technology Open House podcast. Be sure to be on the lookout for future episodes as well as the next episode of our Culture of Automation miniseries.

We look forward to having you. Thanks again and be safe out there.


Information contained in this audio was obtained in part from publicly sources and not independently verified. Neither ICE Mortgage Technology nor its affiliates, make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.

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