Mortgage processing is a time consuming and painstaking procedure. The entire process must be done by trained and experienced underwriters. It involves reviewing all the documents submitted by the borrower during the application for a mortgage loan. The underwriters have to go through all the documents very stringently and determine if the borrower is eligible for a loan. These underwriters also form the first line of defense. The Mortgage Processing Services provider should be able to detect any fraudulent documents and raise a red flag with any such applications. Once the document compliance review is done, the applicant is then subjected to a credit check. If the document review and the credit check are well within the lender’s requirements, then the applicant is eligible for the mortgage loan. The sheer pressure on the underwriters to ensure that they are always at their 100% is what makes the mortgage processing service even more stressful and complicated.
Simplifying Mortgage Processing
Due to the complication in the processing of files submitted by the applicant, by law, an inhouse team of mortgage servicing experts were required. This only made the process slower and expensive. Over the past decade, there has been leniency in the entire process giving way to the start-up of many mortgage outsourcing companies. Any service level agreement with these service providing companies is strictly regulated by a number of compliance laws. Due to the sensitivity of data being worked on, it is imperative that they are well in compliance with the set regulations. The services that can be outsourced are document compliance review, property valuation, credit checking, appraisal ordering, verification of documents, insurance, and escrow checking and assisting with foreclosure-related formalities.
Making it more worthy
The mortgage industry in the U.S is valued at $10.3 trillion. This industry is thriving on the debt of the consumers and has a lot of regulations imposed by the financial regulators of their respective countries. Due to the sensitivity of the data being handled and the complex steps involved in the approval process, the mortgage loan processing services provider will appoint experienced and skilled resources who can take accountability for their work. The use of technology has eased the decision-making process in the industry, however, human intervention is unavoidable in this industry. Due to the complexity in the loan processing steps, this industry generates a lot of employment opportunities as well. There is a possibility of an 11% growth in the need for mortgage loan processors over the next 5 years.
Simplifying claim processing
The mortgage insurance claim process in each country is regulated by their respective financial regulators. The mortgage insurance gives the lenders financial security over the money that has been lent as the mortgage loan in case the borrower fails to repay the loan. Usually, mortgage insurance is taken at the time of the loan origination. The financial institution providing the mortgage loan would require the borrower to sign up for mortgage insurance to minimize the loss if the borrower fails to repay the loan. The mortgage insurance usually covers 25% of the total outstanding loan amount balance. Once a loan account becomes delinquent, the financial institution is obliged to notify the borrower. Failure to respond by the borrower gives the financial institution the liberty to claim for the Mortgage Insurance and start the foreclosure proceeding of the property. With at least 5% claims going through every year, this industry is very vulnerable and outsourcing offers a more cost-effective and secure way of mortgaging.