Sharing A Vision For Mortgage Lending’s Future

Recent regulatory changes have forced lenders to reevaluate their operations to ensure that their document management operations have adequate data integrity controls to satisfy compliance requirements.  Data extraction and validation is the cornerstone of data integrity, and lenders must harness technology to move their operations toward a data-centric model. Here’s a look at a possible future:

Capsilon’s vision defines a new standard for the future of mortgage document management – a standard that brings the concept of straight-through processing (STP) to the mortgage industry, where a technology-enabled model is used to extract data from loan documents to move quality control to the front of the loan process.

The concepts of STP, originally developed to describe electronic debt and equity trading and payment transactions without the need for re-keying data or manual intervention, are now applied in financial markets to improve the certainty of settlement, minimize operational costs, and reduce systemic and operational risk. The mortgage industry can realize similar benefits, and others, by applying the concepts of STP to the loan origination process. This STP model automates much of the loan process, reduces manual intervention, and speeds processing while ensuring loan quality.

The practice of “stare and compare,” in which a human being looks back and forth across two or more documents to verify that the information is consistent across document types, is time-consuming and error-prone, not to mention costly. Plus, using this approach, it’s only feasible for lenders to send a small percentage of loans through quality control. Capsilon’s vision incorporates an exception-based processing model in which human intervention is required only when something that is flagged by the automation engine needs to be validated.

For example, loan data could be extracted and put through a rules engine to automate pre-funding and post-close quality control. Only if the application has a data point outside of the rules parameters would it then be sent to a human for review. This standardizes the process, increases productivity, lowers cost, and minimizes quality risks.

“The pressure on mortgage lenders to QC one hundred percent of their loans, while keeping the cost per loan in check, has never been greater,” said Sanjeev Malaney, CEO of Capsilon Corporation. “With Capsilon DocVelocity, large lenders now have the enterprise-level features and the capabilities they need to automate much of the loan origination process, from loan intake to post-closing, using automation engines coupled with exception-based processing to speed time to close while ensuring data integrity.”