If there was ever an industry in need of automation, it would be the mortgage lending industry.
The lending industry is plagued by time-consuming and error-prone, paper- and labor-intensive processes, front-end systems that do not communicate efficiently with back-end systems, and third-parties that are often not integrated into the process electronically. These problems are exacerbated by the huge volume of loans that are generated each year (nearly 5 million new consumer mortgages alone). “Advances in automation are moving lenders and vendors closer to where they want to be, but the truly paperless mortgage is still a distant vision,” says Christine Barry, an analyst for Celent.
“Not surprisingly, most lenders are dissatisfied with their loan processes,” Barry says. In a Capsilon Corporation survey, 80 percent of lenders said their loan production costs will continue to rise in 2015 as they increase focus on compliance-related activities, with 20 percent forecasting “significantly” higher costs. In fact, 67 percent of lenders have already hired additional in- house or outsourced staff to handle compliance-related activities, which are driving loan production costs higher.