Disclosures And Digital Mortgages Done Right

The term digital mortgage is used extensively in the industry to describe any number of new technologies transforming the loan process. These advancements are improving the borrower experience, making it easier to apply for a loan and complete required tasks during the approval process. Technology solutions are also addressing the way loan officers work, delivering new efficiencies, compliance, and profitability. But noticeably absent up until this point has been a reliable solution to manage the disclosure process.


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It’s Time to Redefine

The inferred digital mortgage promise is the ability of technology to address each step in the loan lifecycle, including electronic disclosure functionality, and improve the experience for all stakeholders involved. It’s time we recognize that a true digital mortgage should deliver a complete end-to-end experience. If an offering falls short due to limited integration with a lender’s existing tech stack, so does the promise of it being a viable component of their digital mortgage strategy. A full solution must address the needs of the borrower, loan officer, and real estate partner throughout the lifecycle of the loan. One party’s overall experience should not come at the expense of others involved in the loan transaction. And major components within the loan transaction, such as digital disclosure management, should not be absent from a true digital mortgage solution. 


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A Complete Experience

SimpleNexus is delivering on the digital mortgage promise through a true end-to-end solution for loan officers and borrowers. With SimpleNexus, loan officers are able to take action on a loan any time, anywhere. Using the platform’s Mobile Originator tools, LOs can access their loan pipeline, order credit, view appraisals, send pre-approval letters, and sign disclosures from their mobile device — all while syncing in real-time with their LOS. And borrowers enjoy the benefits of the platform, from loan application through to closing disclosures. SimpleNexus helps lenders reduce costs, drive LO efficiency, and provide transparency to borrowers and real estate partners during the loan process. The platform also connects loan officers to their borrowers and Realtors to easily share loan progress updates, communicate, and exchange data in a single location throughout the entire loan life cycle.


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A Better Disclosure Process

SimpleNexus has created a whole new disclosure solution to improve the borrower, loan officer, and underwriter experience at the critical loan estimate and closing disclosure stages. Disclosure management on SimpleNexus offers the following features:

Push Notifications: SimpleNexus send borrowers instant push notifications on their mobile device when they need to complete tasks related to the disclosure process. 


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Seamless E-consent and Mobile Signing: Borrowers can easily give e-consent as well as review and sign disclosure documents directly from their mobile app. For disclosure documents that may still require a wet signature, borrowers can print these portions directly from the app and then scan and upload the same document after hand signing to ensure timely delivery to the loan officer.

On-the-Go Execution for Loan Officers: SimpleNexus’ disclosure solution builds on the platform’s Mobile Originator tools. Loan officers can execute their portion of the disclosure signing anytime, anywhere from their smart device. 

Disclosure Tracking: All disclosure tasks are seamlessly updated in the lender’s LOS system automatically to provide compliance peace of mind. The integrated tracking is made possible through a real-time, bi-directional integration between the SimpleNexus platform and the LOS.

The new SimpleNexus disclosure offering is one piece of the platform’s overall toolset. As a complete digital mortgage solution, SimpleNexus delivers a measurable return on investment by reducing close times, increasing efficiency, and delivering customer satisfaction.

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A New Digital Closing Experience

Fidelity National Financial launched a digital closing experience for consumers closing in its title operations. Developed in partnership with Black Knight, Inc., this new closing experience supports both hybrid and fully digital closing options and is tightly integrated with FNF’s title production systems. Designed to digitally engage homebuyers and sellers in the process well in advance of the closing signature ceremony, the experience brings increased transparency, flexibility and convenience to the final steps of real estate transactions.


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“Today’s homebuyers and sellers have come to expect a digital experience that increases the transparency and convenience of the transaction,” said Jason Nadeau, Chief Digital Officer for Fidelity National Financial. “At FNF, we understand this. That’s why we’re committed to creating a totally redesigned real estate experience for the consumer. We’re also making sure our vast network of partners has access to the tools they need to compete effectively in an increasingly digital world.” 


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In partnership with Black Knight and leveraging the company’s Expedite Close technology, FNF created a digital closing experience that is tailored to meet the very specific needs of the settlement community. FNF’s platform is based upon tight integrations with title production and workflow solutions, and optimized for ease of use and maximum adoption. Additionally, consumers are provided with greater visibility and transparency into their documents prior to the actual closing. Integrated eSignature technology allows for many documents to be signed in advance of the closing itself and – in jurisdictions where it is permitted – remote online notarization capabilities ensure sellers and buyers can close on a real estate transaction when and where it best suits their schedules.


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“We’re honored to have collaborated with FNF in developing a new closing experience,” said Black Knight president Joe Nackashi. “Black Knight is committed to our clients’ success, and we wholeheartedly support FNF’s mission to redefine the experience for the millions of consumers they work with annually.”


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While the digital closing platform is loan origination system (LOS) agnostic, it is currently integrated with Black Knight’s suite of solutions. FNF’s title operations will begin leveraging the digital closing platform in Q2 2019.

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Success In The Age Of FinTech

Between robo-advisers, blockchain and biometric data to access bank accounts, a new era of accelerated technology transformation has emerged, affecting every aspect of financial services and altering the banking experience. 

As quickly as new technology surfaces, so too are long established banking tools, such as paper checks, being extinguished. We are experiencing remarkable growth in online payments in the U.S., which has been behind Europe and Asia in adoption up until now. Currently, three-fourths of the transactions processed through U.S. banks are digital. The industry has also been focused on real-time payments, as companies like Venmo and PayPal shift consumer expectations and cater to their need for immediacy. 


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These advancements in technology are driving the entire market to a more digital-centric environment, which could put earnings and capital at risk for many banks. In fact, McKinsey estimates legacy financial institutions could see profits decline between 20 and 60 percent by 2025 due to fintech disintermediation.


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Moreover, consumer expectations continue to evolve, especially as we witness the biggest transfer of wealth in history. With this new generation of consumers, financial institutions can expect new demands, particularly in mobile, internet and other fully digital appliances. Not surprisingly, these new consumers are looking to online provides such as VaroMoney, Venmo and Kabbage. They view traditional banks and lenders as outdated and unable to deliver the types of products and services with the convenience they expect. 


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In fact, a study by Fidelity National Information Services (FIS) found that only 23 percent of customers believe their financial institution is meeting their expectations. In response, some institutions are digitizing the lending experience, but many are still losing out to the online, alternative institutions due to convenience and speed in decisioning. 


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Mortgage lenders are also being impacted by this technological shift. Last year, Quicken Loans passed Wells Fargo as the largest mortgage lender in America. Nontraditional lenders like Zillow are adding even more pressure to traditional mortgage lenders to meet the demands of today’s consumer. In both examples, these organizations already have strong brand recognition, making it even more challenging for traditional institutions. The good news for mortgage lenders is that their execution doesn’t yet match their marketing, but that won’t last.

Finally, we’ve seen rapid growth in P2P and crowdfunding platforms like LendingTree and Monevo since the financial crisis. This makes sense. After the crisis, consumers lost trust in traditional financial institutions, and a supermarket to educate and facilitate choices is beneficial.  But just like in a supermarket, this shelf space is purchased, and consumers can be misled.

We now live in a digital world – we see this in the younger generations just coming of age to use financial tools. My 6-year-old sons mastery of all things digital is a great reminder of this every day. This technology is reshaping expectations, changing the financial services industry and fueling competition as new types of organizations emerge, all contending for market share. In response, traditional lenders must digitize the customer experience, leverage technology and data and prioritize security and safety.  

Create a Truly Digital Customer Experience

A digital customer experience is no longer a benefit. It’s a requirement for today’s lender. Millennials and the quickly emerging Gen Z market expect to do anything and everything from their smartphones, and it’s not just them. Older generations are also becoming more comfortable and reliant on digital channels. My 78-year-old mother is an ardent user of her iPhone for communications, healthcare, financial and travel information. Lenders must now deliver a seamless customer experience across all channels and devices. 

For many traditional lenders, there is a lack of consistency between channels. As mobile becomes a primary channel, lenders must embrace it and explore ways to leverage it to enhance the value they provide to consumers. 

Lenders must also evaluate their digital and in-branch experience and ensure consistency between the two as well. We are working hard on this at Gateway.  Leveraging the Internet of Things and wearable technologies will be key to success. By looking to innovators like Apple and Google, lenders can create unique services like scheduling appointments with loan officers from their Apple Watch or Google assistant. 

Additionally, immediacy and real-time payments are important. A digital platform should alert users of payment dates, enabling them to avoid late payments. The possibilities are endless, but creating a superior digital experience is critical for competing with today’s technology-driven alternative lenders.  

Leverage Modern Technology, Data and the Cloud 

Increasingly, alternative lenders beat out traditional lenders because of the speed of the application processes, fast decision-making and the convenience of an online platform. In response, lenders must leverage technology and data. With the right systems in place and adequate data, lenders can speed up decisioning and create a more convenient and simple process for borrowers. 

Cloud technology is also critical and enables lenders to implement real-time updates to loan origination software that leverages data for a faster decisioning process. For any lender not currently operating on cloud-based technology, this year is the time to begin migrating. 

In the Wake of Data Breaches and Cyberattacks, Security Must Be a Priority 

Finally, security must be a priority, especially as a digital environment exposes financial institutions and lenders to greater risks and security concerns. In fact, in 2018 alone, data breaches compromised the personal information of millions of people around the world. T-Mobile, Quora, Google and Orbitz were among some of the companies that faced costly breaches, and Facebook dealt with several that affected over 100 million users. 

Between the growing number of data breaches and cyberattacks, digital mortgages are substantially at a higher risk than standard ones. Lenders can no longer afford to rely on old infrastructure. Instead, they must focus on upgrading their digital experience and prepare for the possibility of targeted attacks, which is inevitable. 

Ultimately, by increasing their emphasis on security protocols and educating their employees and customers, traditional lenders can secure their digital assets.As technology evolves more quickly, traditional lenders must prioritize the customer experience and place the needs and expectations of the borrower first. If not, they will continue to lose out to alternative lenders, who are rapidly gaining market share. 

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HGTV Driving Demand For REO Renovations

Traditionally, foreclosures have been marketed “as is” with the understanding that any renovations would be the buyer’s responsibility. These properties appealed in large part to the do-it-yourself community with at least some experience in home improvement and repair. However, with the growing popularity of HGTV shows such as Fixer Upper, Property Brothers, and Flip or Flop, this is rapidly changing. Investors are now finding that buyers are looking for properties that have been remodeled to include upgrades similar to those featured in their favorite “wow” reveal series.


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Driven by buyer demand, investors are increasingly requesting significant repairs and renovations be completed to increase the market value of REO assets. These types of improvements can be much more extensive than simple cosmetic repairs and routine home maintenance. This presents a new set of challenges to servicers not only in managing the overall process including budgeting, timelines, and third-party vendors but also conducting analysis to determine which repairs will result in the greatest return.

Managing Renovations Present New Challenges

As the market shifts so do investor strategies for managing REOs. Presently, the value and turn rates are showing a transition out of a rental strategy and towards repairs. Investors are demanding that servicers do more than just basic upkeep. Instead many are looking to analyze repair costs and timelines to drive higher return rates. 


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Meanwhile, servicers have been forced to learn as they go while executing repairs, communicating with contractors and staying within budget. The current tracking models have no tasking or workflow management capabilities; they offer only a basic “fill in the blank” option for fundamental tasks to establish document completion and ensure filing protocols. There is no option to pursue internal communication, much less communication with vendors. Without the ability to request and obtain necessary information, such as interior photos, servicers have been left unable to manage and execute projects effectively. Even with a general insight into price fluctuations, there remains a greater need for detailed analysis in identifying trends. Not being able to determine whether a change is due to sales price or limitation in the market renders this information not particularly beneficial. 


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An additional challenge is that investor and third-party rights are bound to the requirements within the servicing agreement. For example, an arrangement may state that a servicer will handle all property defaults, collection, loss mitigation and possibly foreclosure. In the case of foreclosure, the servicer would also recover losses and file claims. Now, the market is seeing more investors ask for repairs and renovations to decrease losses. The obstacle is that servicing rights remain the same and investors are not adjusting the servicing agreement to accommodate the repairs and renovation necessary. Most agreements only take into account general upkeep and maintenance. If any repairs are to be in the agreement, they tend to be minor issues that address curb appeal, which only require the contractor or third-party vendors and are not treated the same as large-scale projects. Advanced repairs and renovation are still new to the market, and servicers are being charged with implementing this strategy into their established processes. 

Overcoming the Obstacles

To successfully manage the renovations process, servicers need better insight into the condition of assets. More accurate estimates regarding costs and resources are required to complete renovation projects, as well as a workflow-based system to track and manage the actual construction and completion of each project. Mainly, this can be accomplished in three phases: 1) property/asset analysis, 2) cost analysis and 3) construction.


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Phase One: Asset Analysis 

To determine which repairs and renovations should be completed, analysis on both interior and exterior comparables in the same market must be completed. This provides insight into buyer demand, as well as an as-repaired value for comparison. Examining and comparing area comparables, especially viewing interior photographs, helps identify what types of renovations and home enhancements are in demand for the particular area. This avoids making unnecessary property repairs. Technology can provide this data so servicers can also see what related properties sold for and what their subject property may be lacking.

Phase Two: Cost Analysis

Once the desired repairs are identified, servicers must determine the estimated cost to complete the renovations, as well as analyze how these costs impact overhead and eventually the overall ROl. Tools are available to evaluate repairs and renovations by zip code providing servicers with an estimate on what the upgrades should cost. This is helpful with estimating cost analysis and cost controls. The analysis should ensure the identified repairs are justified and make sense, in other words that the resources invested will ultimately yield a return. It is critical during this phase that all of the data and information gathered be tracked and archived to ensure projects stay on budget and meet determined requirements and timelines.

Phase Three: Construction 

When the analysis is completed, servicers must put the plan into action. This often requires that servicers manage multiple third-party vendors such as contractors and agents who will be responsible for the work. Often servicers are managing these projects remotely and whether they are using a construction management company or in direct communication with contractors, viewing and tracking progress is critical. Keys to success include generating automated punch lists for contractors, proactively managing costs and changes that may impact overhead, gathering and saving photos of progress and ensuring costs stay within estimates.

Conclusion

The ability to accurately plan and oversee the entire process is extremely beneficial to servicers. The increased investment in repairs and renovations will add value to properties resulting in higher ROIs. This comes with a new requirement for tracking more frequently and intensively than before. However, working through this learning curve will assist the repair and renovation industry for years to come as buyers’ expectations will only continue to grow. 

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Rising Above A Challenging Landscape: Leveraging A Comprehensive Lending Technology Framework

The mortgage lending landscape is always changing, and the solutions created for yesterday’s challenges may not help new roadblocks that arise. At a high level, the themes are like the issues lenders always face: high origination costs, margin compression, constantly fluctuating rates, and changing regulations. Of course, the devil is in the details. For example, when it comes to interest rates, industry experts like the MBA, Fannie Mae and Freddie Mac speculate that rates could rise to nearly 5 percent by Q4 2019. This creates unique opportunities and challenges for lenders.


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As the fed raises rates to slow inflation, home values have already seen a significant increase, surpassing $15 trillion according to MarketWatch.com.  As a result, more and more lenders are promoting home equity loans and home equity lines of credit as an additional source of lending business. As lenders migrate toward home equity loans, lenders also face a high demand for faster closings. Today’s borrowers expect a quick and painless experience from their lenders, but the state of the industry today makes it difficult to always deliver.  The tools for end-to-end, digital, and paperless lending are out there, but too often lenders must put together a piecemeal solution of software that may or may not work with the other pieces of their technology infrastructure.  And, that’s one of the biggest challenge’s lenders face: with more technology solutions than ever before, it is both more important and more difficult to choose the one that is right for them and their specific needs.

Top Priorities: Speed and Efficiency

To solve the problems lenders currently face, the solution must deliver two key benefits: speed and efficiency. Efficiency gains can come from many different areas. A solution that reduces any human error or duplicate data entry certainly improves efficiency and accuracy. A solution that consolidates vendors into one platform can also create efficiency, as lenders do not have to spend time searching for different solutions from different vendors. When all the work from different vendors is available in one instant report, lenders can save precious time while staying confident that they have all of the information needed to do their job. 


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These efficiency gains help lenders save money by also saving time. Lenders are can reduce turn-times and closing times while simplifying and streamlining their workload. This makes lenders more productive, allowing them to do more with their time. Increased efficiency naturally results in increased speed when it comes to fulfilling a loan.


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Time and cost savings clearly benefit the lender’s bottom line but choosing the right technology solution provides additional benefit. These time and cost savings most importantly improve the lender’s relationship with the borrower. Faster turn-times and closing times help keep borrowers happy, as they receive their loans faster. In addition, cost savings for lenders can easily mean cost savings for borrowers. Money saved is another way to ensure borrowers are satisfied with their experience.


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In today’s landscape, there are plenty of challenges for lenders to face, but this abundance of challenges creates an abundance of opportunities for lenders to use technology solutions to their advantage to rise above the competition. When lenders find the right end-to-end solution, it enables them to rise above the challenges of the industry while giving borrowers the experience they are looking for. With the right solution, lenders can streamline their workload, keep borrowers happy, and remain profitable and competitive in the industry. Solutions that do this empower lenders to confidently face the challenges presented by an ever-changing lending landscape.

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Partnerships In Lending Drive Better Business Outcomes

In today’s fast paced and ever changing mortgage market, vendors are quickly realizing that trying to “go-it-alone” is not always what’s in the best interest of their client.  Vendors need to explore new ways to deliver innovation that specifically addresses the challenges that lenders are facing today and into the future.


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Strategic partnership in lending can improve the customer experience while driving better business outcomes for each partner involved. The right partnership provides major advantages for all involved: mutual customers, each business and the industry as a whole.


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Consumer’s benefit from a seamless and fully integrated offering that truly delivers more tools and functionality in one comprehensive solutions.  The consumer doesn’t have to jump to multiple products and services to obtain their desired outcome.  This provides a frictionless user experience while improving customer satisfaction. 


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Each business partner benefits from the right partnership in a number of ways.  It allows businesses to expand their offering to deliver what their customer is looking for and more specifically needs at this point in time to address changing market condition.  It also allows each partner to leverage their specific strengths while minimizing gaps or others areas that they have less expertise.  


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In addition, businesses can expand their target audience, grow faster than they could organically, and capture additional market share.  Partnerships can also leverage synergies between the two companies, marketing and outreach strengths, sales teams, and brand awareness within the industry.

For example, we recently partnered with Ellie Mae. The integration between Capsilon and Ellie Mae allows mortgage lenders to more efficiently and securely share data between Capsilon’s solutions and Encompass® to drive quality and efficiency at every stage of the mortgage lifecycle.

Mutual Capsilon and Ellie Mae customers benefit from the seamless integration that removes manual work and time delays between the systems, making it even easier for customers to leverage both solutions.

For example, Encompass® customers can now use Capsilon to automate “stare and compare” activities. Companies can immediately access and compare Encompass® data to information within documents, instantly spotting where supporting documents and data don’t match, enabling them to use better data within Encompass & other business applications.

What this means for Ellie Mae customers, and our current mutual customers, is flexibility and options to take advantage of best of breed technologies, in which they can then create a technology stack designed to solve their specific lenders pain points, allow them to create competitive advantages and provide them a platform to proactively respond to the market and their customers. 

This is just one example of how partnership can drive better business outcomes while delivering an improved customer experience. When this happens the entire industry benefits.We are currently working with a number of vendors to develop partnerships and integrate our solutions so that we can continue to add value to lenders.  We are constantly looking for ways to drive better business outcomes.  It stats with an open mind and a willingness to realize that you don’t have to “go-it-alone”. 

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Expanding Homeownership

It’s no secret that low to moderate income individuals enjoy significantly lower rates of homeownership than the rest of the country. It’s also common knowledge that minorities, specifically, black and Hispanic households, are less likely to own homes than other demographics. Federal, state, and local governments have all attempted to remedy these issues.


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The first impactful attempt to level the playing field was the enactment of the Fair Housing Act as part of the broader Civil Rights Act during the 1960’s. The Fair Housing Act made it illegal to discriminate against potential home buyers on the basis of race. After the passage of that legislation, minority home ownership rates did begin to rise but, as of today, rates of homeownership amongst black households are the lowest that they have been since before discrimination was rendered illegal. Although Hispanic households are faring slightly better, they are still much less likely to own their own homes than the rest of the country, as a whole. Although there is no singular variable contributing to this disparity, there are a couple of factors that remain constant.


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Income plays an integral role in widening the gap between minority homeownership and the national average. When considering the reasons for the disparity, many people think that the first, and seemingly most insurmountable barrier to entry is coming up with a down payment. Saving money is difficult for many people, especially for those who are straddling the poverty line. For a single parent who makes less than $30,000.00 per year, the idea of scraping together even a third of that for a down payment on a $40,000.00 house can seem just as daunting and realistic as finding the resources to buy a house two or three times that price. 


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The other factor, however, is often easily overlooked. Many people tend to focus so intently on the financial aspect of the homebuying process, that they often forget that the potential borrower must first demonstrate that he or she has a sufficient credit profile to even merit consideration for a loan. Some might still argue that the credit profile is a secondary consideration; if the potential applicants do not have sufficient income to make a down payment, what difference does it make whether they can qualify for a loan that they can’t afford? However, many are unaware of the existence of programs, such as down payment assistance and mortgage payment assistance, that were established to help get people out of public housing and into homes of their own. 


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Despite the existence of these programs, poor credit is still preventing those who would otherwise qualify for this type of assistance from vacating public housing in favor of their own homes. Fortunately, there are now non-profit entities with which lenders and municipalities can pair in order to get those who are often overlooked the assistance that they need. These non-profits utilize a combination of credit coaching and credit education to instill behavioral changes that lead to sound financial decision making. This type of assistance is often invaluable to those occupying the lowest wrung on the financial ladder, and has the potential to make a multigenerational impact. 

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AI Based Textual Analysis vs. Other Approaches

Today there are many technology options available to assist in the automation of mortgage loan processing.  Some solutions are well marketed and low cost with great claims of vast libraries of rules and an ability to provide tremendous results.  There are even approaches which claim that OCR is an antiquated technology, but go on to either apply very low cost labor or other older technology approaches or a combination of these.  

Alternative Approaches

There are three typical methodologies applied to document classification. Below, we provide a high-level overview of each, along with some discussion of data extraction with each approach:


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Full Page OCR for Document Classification

This approach to document classification is distinct from most other classification technologies in that it uses a full-page OCR pass for every page of every document presented to it. Ideally, an entire page is read in less than half a second and then a set of rules are applied to determine which document type each page belongs to. While this would seem to be an obvious way to approach the task of identifying the very diverse documents found in the mortgage industry, most technology providers are unable to deliver the speed necessary to successfully scale with this approach.


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Advantages of this approach include:

>>Ability to index document versions which may have never been seen before by the system assuming they are lexically similar (same words and phrases found throughout)

>>Ability to accurately distinguish between leading pages and following pages, thus eliminating need to include separator sheets in the scanning process


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>>Ability to “discover” data for capture in a similar way to how a human being does it using words and phrases across the entire document to find key data.

>>High speed OCR allows for almost infinite scalability with a relatively small hardware footprint

Visual Classification also known as Fingerprinting

This is an old approach which has is been remarketed and renamed today by some vendors as AI for use in the mortgage industry.  While it does recognize and have the advantage of sub-second speed it is NOT an OCR solution.  Therefore instead, an image analysis (non-text based) approach is used to identify documents and page types. 


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This solution attempts to differentiate between document type A and document type B largely by examining the distribution of ink on samples of each document type. This is like a thumbprint analysis i.e. a graphical signature of each document type is learned and remembered.

The Advantage of this methodology include:

>>Performance (for the images successfully processed by the image signature method) 

Disadvantages of this methodology include:

>>The layout-specific configurations needed for each document variation can take a long time to set up if the number of document variations/types is high.

>>These layout-specific configurations need to change if the layout of a document ever changes.

>>The graphical signature approach tends to be less reliable with more than one hundred document variations/types to compare. This can affect accuracy in some cases.

>>The time to process images tends to be linearly related to the number of document variations/types.

>>This approach presents challenges when attempting to detect document boundaries for multiple page documents and does not provide an ability to extract data from the documents once identified.

Dynamic Learning

This approach does NOT have the advantage of a sub-second OCR solution but it does use OCR as part of its document classification and data extraction methodology to enhance its results.  In general, the system is a mix of preconfigured rules, a learned knowledgebase and layout-specific configurations. The rules are configured through a GUI but more complex operations require scripting. The technology is typically configured for mailroom and Accounts Payable environments.

Learning is achieved by running real production data through the system to a human verification step. The system attempts to learn from the document classification and data extraction decisions made by the verification operator.

An advantage of this technology is: In-production learning allows rapid use of layout specific information. Unfortunately, this advantage is also a disadvantage. Many higher-volume sites require regression testing prior to promotion of any configuration change into production. This methodology is based on a belief that this is not necessary. 

Other disadvantages include:

>>As the system adds layout-specific templates, the system gets proportionately slower

>>Separator sheets between multi-page documents are required

>>Production errors occur if layouts change

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Borrowers Want A Combination Of Digital & Personal Interaction

Customer satisfaction with primary mortgage originators increased in 2018 as digital origination channels play a more significant role in the process, according to the J.D. Power 2018 U.S. Primary Mortgage Origination Satisfaction Study.SM However, despite a clear preference for digital interaction at several points in the mortgage origination process, personal interaction with a representative still plays a key role, particularly when it comes to following up after an initial inquiry.


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“The mortgage marketplace is changing rapidly as traditional players and new digital-native entrants ramp up their digital and mobile offerings,” said John Cabell, Financial Services Practice Lead at J.D. Power. “While improved digital offerings are helping mortgage originators build customer satisfaction, it is important to find the right balance between digital, self-service offerings and personal interaction with a representative. Technology alone is not a magic bullet in this market; the key is knowing where to leverage it and where to layer in more traditional forms of one-on-one support.”

Following are some key findings of the study:

Overall satisfaction improves as digital plays larger role:Overall satisfaction with primary mortgage originators is up 10 points (on a 1,000-point scale) in 2018. This is driven in part by increased customer utilization of digital and mobile channels. On average, customers use 3.1 different channels during the mortgage process, with phone (72%), website (69%) and email (58%) being the most commonly used channels.


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Representatives still play major role in customer satisfaction:While usage of digital channels has increased, just 3% of mortgage customers exclusively rely on digital self-service channels in the origination process. In fact, overall satisfaction is highest among customers who spoke only with their lender in person or over the phone (871) when applying for a mortgage, followed by satisfaction among those who used a mix of personal and self-service tools (868). The most important parts of the process in which representatives add the greatest value are in the follow-up contact after an initial inquiry and when confirming loan terms and payment.


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Speed of contact is critical driver of satisfaction:Satisfaction levels decline sharply for each day spent waiting after inquiry for contact from a lender. Overall satisfaction among customers who receive a contact within one day is 869. Satisfaction falls to 852 after two to five days and to 806 after six or more days. The inquiry channel with the fastest overall contact times (2.0 days, on average) is online via smartphone/tablet, followed by online via desktop (2.2 days). Though not all customers use digital channels, those who do value speed of contact.


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Our intelligent digital loan manufacturing workflow helps lenders automatically identify and complete rudimentary tasks throughout the enterprises lending lifecycle, streamlining the origination process to assist is closing loans faster. Our digital mortgage platform offers mortgage lenders the ability to further simplify their origination and closing process while keeping borrowers, realtors, and all other interested parties involved every step of the way.

The Lodasoft difference is in focusing on the loan, manufacturing it in as little time, with as little errors as possible, while communicating every step of the way. When implementing Lodasoft, lenders can take a traditional pipeline-driven model (file by file) and move to a prioritized task-driven model while automating communication simultaneously.

By focusing on the loan, lenders are able to identify all of the mini-bottlenecks from lead to prequalification to in-process, closing, post-closing and beyond. The borrower will see the benefits of more transparency and faster processing. As a result of simultaneously automating communication along the way, all interested parties have a new sense of involvement creating much deeper relationships further driving greater borrower satisfaction.

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