The big story in the mortgage industry last week was the huge growth in mortgage origination’s.

HouseAccording to the Mortgage Banking Association’s (MBA) Weekly Application Survey, home loan applications climbed 49% on a seasonally adjusted basis – their largest week over week gain in since 2008.  On an un-adjusted basis, the Index soared 119%.

Most of the growth can be attributed to sharply lower interest rates combined with the FHA’s announcement of lower mortgage insurance premiums.  Yet what was noteworthy was the application volume growth, which was not just from homeowners taking advantage of the dropping rates to refinance (66%), but from new loans as well (up 24%.)

All of this leaves lenders with the proverbial great problem to have: too much business. In this Sunday’s Los Angeles Times article, the president of a south Orange County brokerage was quoted: Our business is exploding.  We can’t write deals fast enough.” 

Lenders have several options to deal with the influx of new business:

  • Turn it down;
  • Process mortgage packages but with delays that lead to dissatisfied potential borrowers; or,
  • Figure out how to process loan volumes more efficiently.

The third option is of course the most appealing for the long-term success of a brokerage, but what is the best approach to applying technology to offer a more efficient, borrower-friendly environment?

We all know that mortgage packages are complex and entail completing, tracking and extracting data from 30-50 different documents that include disclosures from a number of federal, state and local regulatory groups, as well as forms from other stakeholders including the lender.

The ideal for originators is to develop automated processes that lead to completing closings in a timely, error-free manner.  Mortgage automation is not a new concept: leading brokerages have been successfully adopting technology to process complex documents faster and more accurately.

Mountain West Financial, a full service, privately held mortgage broker in Redlands, California, employed Ephesoft’s Smart Capture® solution to automatically classify over 225 different document types that make up the over 4 million pages of annual paperwork volume in their portfolio.  This system alone has reduced the mortgage file processing from 45 minutes a page to just a couple of minutes.

In 2015, with the rising volume of business coupled with the new regulatory disclosure documents for compliance with the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) mortgage originators need a technology strategy that eliminates manual processes and provides flexibility to handle varying workloads and changing document types.