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Paperless Goes Beyond Origination

When we talk about going paperless, we always talk about origination. However, paperless ROI goes much further. For example, Gateway Mortgage has expanded their use of Axacore’s XDOC document management platform beyond loan origination into their human resources and loan servicing departments.

Gateway recently implemented paperless workflows to help eliminate the regulatory and management risks inherent with paper. XDOC’s built in scalability and flexibility made it easy for Gateway to initiate paperless processes across more of their organization. Axacore worked with Gateway to create multiple projects that are integrated and configured independently of each other, which helped Gateway achieve their company-wide goal of expanding document controls past loan originations.

“Our loan origination process was paperless, however, certain back office and servicing functions were still relying on paper which created a lot of risk,” said Kevin Osuna, Senior Vice President of Mortgage Servicing at Gateway.

“Because XDOC so flexible and scalable we were able to easily deploy paperless workflows independent of what we had in place, yet on the same platform very simply,” added Osuna. “We have relied on Axacore’s expertise in all things document management for several initiatives in the past few years and they always deliver.”

“All too frequently we see lenders go paperless for their loan originations, then forget about the back office and post origination functions. In today’s highly regulated environment, the risks do not stop after a loan funds,” Said Aleks Szymanski, CEO Scrypt, Inc. “Gateway’s ability to recognize these risks, and their willingness to tackle them head on by expanding their use of XDOC made them a pleasure to work with.”

About The Author

[author_bio]

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Learn From Your International Peers

You Can Download This Entire Article As A PDF HERE

Dave-CaldeiraExecutives working in financial services have long been vexed by the paper documents that clog their systems. Yet, experience shows that paper-based systems work against every major goal institutions have: improve the borrower experience, reduce costs and meet regulatory requirements. Paper is a major impediment in each of these areas. A leading bank in Australia recently took on the challenge to eliminate paper in its mortgage operations, and improve its ecological footprint and customer experience – it serves as a model for U.S. banks and lenders to do the same.

In the U.S. mortgage industry the government has made it clear that mistakes in loan files are no longer tolerated. Regulator changes to the Real Estate Settlement Procedures Act (RESPA) set a tolerance on the amount the closing cost estimates (delivered to new home loan borrower) could vary between the Good Faith Estimate required under the Truth in Lending Act, and the HUD-1 final settlement report delivered at the closing table. It has been widely argued within the industry that this would require a move to paperless loan origination as changes on paper documents will create problems that delay loan closing.

Meanwhile, the Consumer Financial Protection Bureau (CFPB) has also declared that each financial institution bears the burden of proof that its own staff, and its partners, have met this customer satisfaction goal. Satisfying every borrower is not a realizable goal. In order to protect themselves from regulator action in the face of failure in this regard, lenders and servicers must have an audit trail they can use in their own defense. Paper documents do not lend themselves to the type of verifiable, time-stamped and tamper-proof records offered in electronic audit trails. Going through paper with a government regulator during an audit would be a nightmare for any institution.

In addition to standing in the way of its progress toward the bank’s highest priorities, paper is also a substantial drain on the bank’s ability to compete against those institutions with multiple origination channels.

A New Process from Down Under

So what are banks doing to eliminate the paper chase and move into the world of complete digital management? An interesting example can be found in Australia where Suncorp, the nation’s fifth largest bank, has taken dramatic steps to alleviate growing pains associated with paper.

Suncorp is part of the Suncorp Group, which includes general insurance, banking, life insurance and superannuation brands in Australia and New Zealand. The group has 15,000 employees and relationships with nine million customers and $96 billion in assets. It also processes approximately 40,000-60,000 mortgages per year. As a truly regional bank with a strong suite of deposit and lending products, the bank prides itself on connecting with customers and communities.

The mortgage market in Australia is similar in many ways to that of the U.S. Growth is contingent on consumer confidence, which is driven by continued employment and low interest rates. Banks in this $1.3 trillion market also face similar government regulations and environmental concerns that are forcing them to rethink how they process an ongoing glut of paper. Innovation is an area where banks can increase efficiencies within mortgage operations.

Suncorp recently tackled one of its most complex business processes by adopting an integrated smart process application (SPA) solution that included a digital capture platform along with a new electronic content management (ECM) system. The solution went live in November 2011 to collect information from loan applications and assign it to a paperless workflow application. The digital transition removed the need for thousands of paper files to be handled by the loan processing team at any one time.

Before the solution was deployed, Suncorp Bank’s mortgage processing workflow called for three separate versions of every loan file to be handled. Loan applications received from branches and mortgage brokers were processed as paper files, manually entered into the bank’s core system, then into another electronic “workflow” version in the bank’s manual tracking system.

This manual tracking system was updated by each processor as the physical loan file, and core system workflow moved from team to team throughout the end-to-end process. Suncorp Bank’s mortgage processing team began exploring alternatives to its manual processes in 2010.

“We were looking at ways to improve our processes and turnaround times for customers, and decided to automate things and work a little smarter,” said Stuart Nielsen, Suncorp Bank’s executive manager of mortgage services.

“We were sending tens of thousands of files a year to an external storage provider, and the difficulty of retrieving them from off-site, and within our offices, was frustrating.” Initially the aim was just to go paperless; however after talking further with technology providers, the goal was broadened to embrace an all-digital workflow.

“We saw we could use optical character recognition (OCR) not just to image the file and categorize it, as some of our competitors do, but also to route it. There’s quite a clever workflow engine at the back-end of this platform. The goal was to have one file and no paper.”

Loan applications and supporting documents are now ingested via fax or as email attachments sent from branches and brokers. Scanning is done there, where in the case of the Suncorp Bank branches, a fleet of more than 200 multifunction devices are configured with a scan-to-Kofax button.

The loan application data is either entered manually into the core banking system or transferred via electronic lodgment. There are also many supporting documents such as bank and credit card statements, tax returns and income validation. These documents are all imaged and categorized with the help of OCR.

“The mortgage processing platform is the first large scale imaging project undertaken at Suncorp Bank, and has resulted in our imaging system being among the best, if not the best, in the Australian market,” said Nielsen. “One of our goals was to get the level of document recognition up to our target of being 80 percent automated, a goal we were able to achieve within six months of the launch. It’s really exciting to work with technology that is so intuitive, providing us scope for further improvements and the ability to teach new things.”

“In addition to removing paper and improving processing speeds, this system gives us better capabilities around fraud detection and file quality. No longer do we have to order files back from a physical storage facility, they are now instantly available online, with a full user audit trail, adding to the security of the transaction. Our fraud and quality assurance teams have faster, more user-friendly access, including remote access, to the loan files, improving our ability to detect irregularities in loan applications and in turn our quality assurance.”

The Suncorp team implemented the solution in just over 12 months, and loan processing times have reduced by 10 percent, with further benefits still to be realized as recognition rates continue to improve. The smart process platform has now spread within Suncorp for human resources applications, personal insurance, commercial insurance and accounts payable.

Desks now look clean and uncluttered and a 39-foot long filing cabinet was sent to the recycle bin. In addition to speeding up mortgage processing for customers, automation is saving Suncorp hundreds of thousands of dollars each year in paper, printers and toner. The green benefits are also considerable, with an estimated 400-plus trees spared each year, and the amount of carbon dioxide emitted into the atmosphere reduced by approximately 80 tons.

Opportunity for U.S. Lenders

There are many problems with paper and many opportunities that justify getting it out of an organization. Institutions that make the effort to do so will see their efforts repaid in short order, and that includes both the expense to implement new solutions and the advantages offered by automated systems. Doing it from a unified software platform makes it easier to implement and manage, especially when banks have the ability to develop and deploy SPAs that are tailored around their mortgage processing needs and provide a “plug and play” roadmap to mobile capabilities.

Like Suncorp, U.S. lenders need to rethink the way they process mortgages and engage borrowers. In fact, a top-five U.S. mortgage lender is optimizing their mortgage processing with the industry’s first open mobile capture platform introduced by Kofax earlier this year. They are enabling mobile mortgage application processing in addition to extending the mobile platform to check deposit, new customer onboarding and new account openings. Most importantly, the bank will be able to lower their total cost of ownership. Other U.S. lenders can also succeed in cost containment, improved customer experience and regulatory compliance only if they refine their approach to the mortgage origination process by implementing a firm foundation—committing to the complete elimination of paper in their processes.

About The Author

[author_bio]

Dave Caldeira is senior vice president of Product and Solutions Marketing at Kofax where he leads the strategy and market development of smart process applications that help organizations simplify the business critical First Mile™ of information-intensive customer interactions. He has more than 30 years of experience in enterprise software and professional services industries, and previously led product marketing and strategy for IBM’s Case Management business in the Enterprise Content Management segment.

See What I Mean?

Every time my kids get home from school I bother them to do their homework. I’m sure they think I’m a broken record. Similarly, I’m sure that you think I’m a broken record because of how often I talk about paperless technology. But this technology is catching on. For example, a provider of cloud-based document sharing, imaging and management solutions for mortgage lenders, announced that in 2013, it experienced significant growth as it increased the number of U.S.-based staff by 180 percent and its monthly recurring revenue by 66 percent, in addition to achieving other major milestones.

In January 2013, Capsilon acquired DocVelocity, a document imaging distributor of Capsilon’s technology, from Flagstar Bancorp. Following the acquisition, the company adopted the DocVelocity name for its imaging system. Capsilon has continued to update DocVelocity to provide increased productivity and flexible access for customers. The updates offered throughout last year included batch delivery of loan packages to investors and service providers, improved performance and automatic updates for the Desktop App and camera capture for the DocVelocity Mobile App. In addition, Capsilon now offers users of DocVelocity access to a variety of educational classes designed to train them how to more successfully manage and process their mortgage documents.

Capsilon introduced new Network Delivery capabilities that enable DocVelocity users to deliver secure and compliant loan packages to leading GSEs and financial institutions in December 2013. Lenders can deliver a single loan package or a group for batch delivery to Chase, Citibank, Flagstar Bank, Wells Fargo Bank, Fannie Mae, Freddie Mac and the Federal Housing Authority according to their prescribed formats and protocols.

The company also opened new offices in Troy, Mich. and Irvine, Calif. to better manage Capsilon’s dramatic growth. The new offices enable expansion of services and support capabilities for mortgage lenders and investors throughout the United States.

“Throughout 2013, our company enhanced DocVelocity and built the national infrastructure to enable Capsilon to increase market share and continue to provide innovative technology solutions to the mortgage industry that focus on increasing profitability and facilitating compliance,” said Sanjeev Malaney, chief executive officer of Capsilon. “These efforts offer a solid groundwork for our continued expansion in 2014.”

About The Author

[author_bio]

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

New Paperless Trends Emerge

*New Paperless Trends Emerge*
**Data Shows Advances**

files***In its ninth Path to Paperless study Xerox Mortgage Services found that even with compliance demands front and center, 63% of respondents noted having electronic document solutions in place, compared with 55% in 2012, which underscores the commitment to adopting paperless technologies in the near term. Here’s what else they discovered:

****The survey showed other positive trends in the acceptance and implementation of electronic initiatives, including:

****>> 78% of respondents’ companies are implementing technology to handle the flux of the industry.

****>> 45% feel their LOS’s imaging capabilities are lacking – they either use the capabilities but do not consider them sufficient or do not use them due to considering them insufficient.

****>> 76% of respondents prefer solutions that accommodate paper-sourced, imaged and electronic documents, and 75% value solutions that work seamlessly throughout the entire loan lifecycle.

****>> 80% of respondents cited decreased turnaround and processing time per loan, and 78% cited decreased processing costs per loan as benefits of going paperless.
2013-path-to-paperless-data

****You can request a copy of the Path to Paperless Survey HERE to see how your paperless technology initiatives compare to your peers. The survey results represent a cross section of industry executives and functions ranging from origination, underwriting, closing and more.

Progress In Lending
The Place For Thought Leaders And Visionaries

Head In The Clouds

*Head In The Clouds*
**By James Comtois**

JamesC***When I first started covering the mortgage technology industry, one of the most frequently used buzzwords was “paperless.” Firms were very eager to reduce the paper trail of the mortgage lending and servicing processes. These days, the industry is pretty gosh-darned paperless. Heck, not just the industry, but the world (a number of newspapers I used to write for now no longer have a print edition and are completely paperless products).

****With the industry having more or less succeeded in being a paperless one, the trend has gone much, much further. But the more the industry has gone paperless, a new problem has developed—that of storage within a firm’s computer network. Although there’s no longer the need for those large, metal filing cabinets in the office, the need for more virtual cabinets has arisen, now that hard copies are becoming things of the past.

****Now, the industry relies heavily on wireless technology and cloud computing, also known as “the cloud.” With the cloud, not only do we have to no longer worry about using paper, but also cluttering up storage space on a computer’s memory is now becoming a thing of the past.

****One firm that’s all about maximizing the use of such modern technologies as smart phones, tablets and the cloud is FotoNotes. Originally launched in 2009 as Fotobabble, FotoNotes helps firms make the most out of wireless communications technology. (Considering this is inevitably where all industries are going, it looks to be a pretty smart business model.)

****Recently, the organization has launched a cloud platform for property preservation and other real estate services.

****Launched at the National Association of Mortgage Field Services Annual Conference in Chicago earlier this month, the FotoNotes’ Mobile Property Preservation Solution boasts such services as enabling users to create, assign and manage work orders; access work orders in the field; capture photos and other data from the job site; and automatically stream work orders, photos and data to and from such back-office systems as Property Pres Wizard.

****In the online demo for the product (which can be found here http://www.fotonotes.com/sneak-preview-fotonotes-mobile-property-preservation-solution/ ), FotoNotes founder and CEO Kamal Shah explains that the FotoNotes’ Mobile Property Preservation Solution will ultimately enable udders to streamline operations, reduce manual work, improve vendor scorecards and (this perhaps could be the best part) get paid faster.

****The demo also shows that signatures can be captured, reports can be generated (in PDF format) directly onto one’s mobile phone and then emailed.

****All of this, of course, can be done without eating up any memory on one’s PC, tablet or smart phone.

James Comtois has been a financial journalist for more than 14 years and has covered the real estate and mortgage industries for more than eight of those years. He has written for such publications as Crain’s New York Business, MarketWatch, Private Equity Real Estate News and National Mortgage News. He lives in Brooklyn, NY.

The March Continues On

*The March Continues On*
**By Tony Garritano**

TonyG***We haven’t heard much these days about the march to the electronic mortgage. Is that a bad thing? Not necessarily because lenders are automating more processes to maintain compliance and efficiency, which in turn is bringing them closer to adopting a full e-mortgage even if that is not their intent. Also, vendors keep making moves on their end to prepare lenders for that final jump into full e-processes. Here’ an example:

****In this case, Fiserv has established the interface required for clients to participate in the Electronic Case Binder Program of the U.S. Department of Housing and Urban Development’s (HUD) FHA Lender Insurance Program. LoanComplete: Delivery Manager enables the review, loan completion and electronic delivery of loan documents and packages, resulting in Fiserv being listed as an electronic case binder vendor on the FHA Lender Insurance Program website.

****HUD encourages lenders to submit electronic case binders in lieu of paper ones. This not only benefits HUD, as they can audit and provide feedback in a timelier manner, but it also creates greater compliance for institutions and reduces the operational costs of delivery. Using the LoanComplete: Delivery Manager from Fiserv, institutions will no longer have to wait to receive notifications from HUD; the solution automatically monitors the HUD web portal looking for new or rejected loans that have been flagged for case binder submission. These loans are automatically routed to a “work queue” for the operational user to select, review and audit the loan documents prior to delivery. The solution then stacks the loan documents in HUD’s specific stacking order and distributes to HUD in minutes. This automation reduces the time to build and deliver a loan package from days to minutes.

****“Further expanding our loan document and data quality solution to include electronic delivery was a critical component to enhancing our loan completion strategy,” said Jay Coomes, vice president of product management, Enterprise Content Management, Fiserv. “It demonstrates our ability at Fiserv to offer a true end-to-end paperless environment from point of origination all the way through electronic delivery to investors and other third parties.”

****LoanComplete automates the oversight and audit of loans as they move through the life-of-loan process; ensures loans are complete, accurate, current and saleable; and reduces compliance risks by incorporating a single, overarching loan auditing system that leverages standardized, automated loan quality control processes for loan origination, servicing, compliance, sales and delivery.

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

For Those In The Mortgage Market This Is No Time For The Weary

*This Is No Time For The Weary*
**By Tony Garritano**

TonyG***You can’t rest on your laurels. You have to keep moving forward and keep adjusting to meet market needs. Too often established vendors think that their work is done. That’s just not the case my friends. A good example of how a vendor has done the opposite can be seen in what Capsilon is now doing with DocVelocity. Here’s the scoop:

****DocVelocity now includes an advanced printer driver, local page caching and page streaming to speed up the way mortgage documents are imaged, stored, downloaded and viewed. The updated printer driver enables users to print documents from their desktop applications with reduced file sizes, making them more efficient for uploading, downloading and storage.

****Intelligent page streaming downloads images only as they need to be viewed by the user, providing a visible performance improvement. Additionally, when users download a document from the cloud to their desktop, images are locally cached to increase speed when needed again.

****“We’re very impressed with the increased speed of the newest DocVelocity desktop application,” said Bruce Clarke, chief technology officer of Michigan Mutual Inc. “The faster solution is making our users more productive.”

****“DocVelocity’s improved desktop application makes optimal use of system resources to provide users a better overall experience,” said Sanjeev Malaney, chief executive officer at Capsilon. “The latest updates enable lenders to use DocVelocity faster and more effectively than ever before.”

****So, DocVelocity is advancing. I hope that others are, too.

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

More On The Paperless Front

*More On The Paperless Front*
**By Tony Garritano**

TonyG***I know that I might be boring you this week with all these paperless processing updates, but I can’t resist. Today I learned that Orion Financial Group, a provider of mortgage assignment, lien release and document retrieval services,is now providing mortgage document imaging and storage services to small to medium-sized investors. With its proprietary i3 software, Orion efficiently performs full collateral file reviews and instantly identifies missing documents.

****“We’re excited about offering this additional service to clients,” said Mike Wileman, Orion’s president and CEO. “i3 is a cutting-edge solution that streamlines and eases the collateral file review process.”

****i3 determines which documents are missing from a predetermined set of expected documents—provided either by the client or by Orion–and then creates a missing documents report for investors to review. Orion also offers the option of retrieving and tracking documents from nearly any source.

****Through i3, Orion provides imaging and storage services that give clients control over–and easy access to–any collateral file. Clients are able to access their document images 24 hours a day, seven days a week, through individual, private and secure accounts on the Orion website. Each document has its own link.

****Orion customizes the services it provides based on the individual investor’s needs. “Depending on what the investor wants, we can identify individual loan types, or specific portfolios by seller. We can create a collateral file out of a hybrid file–a combination of origination and servicing documents,” Wileman said.

****Clients also have access to all of Orion’s post-closing services, such as document retrieval and the recording of assignments. “We are offering investors a one-stop solution to quickly and easily complete and record assignments on new loan acquisitions,” Wileman said.

****Orion’s i3 is the second new product the company has introduced in 2013, Wileman added. Earlier this year, Orion rolled out a national settlement services solution for small to mid-sized investors. Since its inception in 1993, Orion has grown significantly in terms of its business and revenues. In the last five years alone, Orion has seen a 170 percent increase in the number of transactions it performs. In addition, the company’s client base has tripled since 2008, he said.

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Taking Going Paperless Even Further

*Taking Going Paperless Further*
**By Tony Garritano**

TonyG***In yesterday’s newsletter we told you about how one lender was getting huge ROI from going paperless. Really with all the new regulatory requirements it’s hard to imagine a lender complying in a paper world at. There’s too much to handle. And vendors realize this, which is why they keep advancing their applications. For example, the DocVelocity imaging system now offers batch delivery options, enabling users to package and deliver documents from many loan folders at the same time. Here’s how it works:

****The new batch delivery feature saves time compared to one-at-a-time processing, as documents from hundreds or even thousands of loans can be packaged and delivered at once. Because DocVelocity’s document capture and online collaboration features ensure loan documents are correctly named, verified, statused, notated and stacked before they are prepared for delivery, lenders are assured their loan deliveries are done correctly as well as quickly.

****Lenders can use DocVelocity’s batch delivery capability to streamline many business processes by sending in-process loan files to contract underwriters; exchanging needed documents with auditors, quality control providers and other services; and delivering pools of closed loans to investors, all with reduced errors and at significantly lower costs.

****“DocVelocity’s batch delivery saves time by enabling lenders to process hundreds of loans at once,” said Sanjeev Malaney, chief executive officer at Capsilon. “Batch delivery is one more way our customers gain greater efficiency in a totally paperless work environment.”

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.