Getting the Paper out of Your Mortgage Processing

Topics: Financial Services Records and Information Management

As the mortgage industry continues to evolve, if records management is not done right, the volumes of records created during the mortgage process can slow you down and create unnecessary cost or risk. What are you doing to ensure your existing paper-based records are secure as your organization makes the move to digital?

Homebuyers are increasingly enamored of digital mortgage applications and processing, which promise consumers an easy mortgage process, but going digital doesn't necessarily equal a simplified records management process for mortgage service providers. For example, Quicken Loans used a 60-second Super Bowl 50 ad to showcase their Rocket Mortgage online application, highlighting the company's continued push towards online mortgage processing. However, making the loan origination process easy for consumers still requires a lot of work to underwrite a loan and manage the records - paper and electronic - required to process a single mortgage.

As the mortgage industry continues to evolve, if records management is not done right, the volumes of records created during the mortgage process can slow you down and create unnecessary cost or risk. What are you doing to ensure your existing paper-based records are secure as your organization makes the move to digital?

A growing number of homebuyers (just under a quarter of all borrowers in 2014) are applying for home mortgages online. This trend can only increase as tech-obsessed millennials move into their prime home-buying years. Why, beyond the obvious advantage of convenience, do homebuyers prefer online mortgage processing? A Consumer Financial Protection Bureau survey reports that many feel more empowered by the new method because it provides a better understanding of the loan process.

As digital mortgage processing proliferates, you may want to consider if your overall operations are ready to meet the demands of a new digital frontier. If you're still grappling with managing paper, in addition to your digital files, the answer may be no. This is why engaging a trusted vendor for your offsite records storage of paper-based documents, who can also help you make the transition to digital, makes sense. By doing so, you'll be able to fully concentrate on making a seamless transition to online mortgage applications and processing.

Paper Documents: Starting the Long Goodbye

With more loans originating as electronic files and as more paper mortgage document files are imaged after closing, the push towards digitization will continue. Market trends are pushing mortgage originators servicers towards an easy online experience for consumers, but for most mortgage servicers the workflows that run their business still require a thoughtful, comprehensive records management strategy that can handle paper, images and electronic files.

Regulatory pressures stemming from the 2008 Financial Crisis necessitate stricter due diligence when underwriting a mortgage, which has increased the page count of a conventional mortgage. In fact, a single mortgage file can now range between 500 to 2,000 pages with the average ranging between 600 to 700 pages, according to mortgage technology provider VirPack.

A versatile records storage provider should be able to help you regardless of file format – paper, image or electronic file. You need a records storage provider who can not only move onsite paper records offsite to a climate controlled, secure facility, but one who can also offer a smart scanning program and the ability to retrieve paper and electronic files should you need quick access to stored records. Your records storage provider should be able to store all these files based on your retention policies as well as provide image on demand capabilities to support overflow needs and special projects.

Given the complexity and sensitivity of mortgage files, your records storage provider should be fluent in the special needs of the mortgage business. Find a provider with a range of loan file management services. These should include:

  • Automated classification technology for proper doc typing and indexing of digital loan files.
  • Secure preparation and transfer of Mortgage Servicing Rights (MSR) and entire loan portfolios.

Embracing a Hybrid Document Landscape

As mortgage underwriting continues to go digital, banks and lenders will need to adapt their best practices accordingly. But since there's little chance that paper loan documents will disappear completely, engaging an experienced records management vendor that uses a workflow driven process to handle it all makes a great deal of sense. By taking this step, you'll secure your files and free up valuable time and resources that you can redirect to your organization's shift to the digital landscape while also ensuring continued compliance with your records management program, which can now handle varied document file types.

Now that you have paper records and digital mortgage records to manage, along with the loan data generated by online applications, you should review your records management strategy. This Iron Mountain e-book shows you how Information Economics can help.

Iron Mountain Recommends: Think before You Trash

One key aspect of successful records management is paying attention to what you keep and what you don't. Along these lines, an array of Iron Mountain services can help you preserve the documents you need and dispose of those that have outlived their usefulness. These include:

  • Policy guidance through an online platform.
  • Indexing services that ensure ready access to all your files – paper and digital.
  • Secure facilities that provide the proper environmental conditions for long-term storage.
  • Secure shredding options that allow you to dispose of records onsite at your office or offsite at one our service centers.

Related

Increasing The Efficiency Of Your Mortgage Document Management
Increasing The Efficiency Of Your Mortgage Document Management

Topics: Store and Protect Information

Mortgage lenders and servicers face declining originations and escalating regulatory requirements. This white paper looks at how you can increase the efficiency and profitability of your mortgage loan business. It offers insights into offloading the burden of organizing, managing, and protecting mortgage documents so you can process loans more efficiently, respond to buyers more quickly, and stay ahead of the auditor — making it easier to achieve your profit goals.