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Benefit by Outsourcing Mortgage Underwriting in the year 2021

Posted by maxbpoblog Apr 03,2021

outsourcing mortgage underwriting services

Mortgage Underwriting is an important part of mortgage processing. This is the phase of the mortgage process when a mortgage loan underwriter verifies the credit worthiness of the loan applicant by checking his income, assets, credits, debits and other liabilities as well as collaterals.

The year 2020 with its pandemic situation has brought in some challenges and changes in Mortgage underwriting.

Mortgage Underwriting Challenges and Changes in Pandemic

The pandemic situation of 2020 has resulted in following challenges and changes in underwriting:

  • Lack of access to information and official processes at all levels of government
  • World has become virtual leading to virtual processing and online closing
  • Online verification and transition to online avenues
  • Credit score than become even more important than 2020

With the challenges and changes coming in, lending organizations are finding it difficult to complete the mortgage underwriting process by themselves and are opting for hiring mortgage processing outsourcing companies.

Benefits of outsourcing mortgage underwriting

Hiring mortgage outsourcing companies for underwriting can be beneficial for lending companies in the year 2021 because of following reasons:

Use of Technology

As the world has become virtual, manual underwriting, where the mortgage loan underwriter used to do everything offline, has become effective. To cope up with the changing world, mortgage process outsourcing companies have invested in automation tools and software. These tools and softwares can automatically approve the loan and put the process on a faster track.

Human expertise

Although software can make the process faster, human intervention is still required. There may be situations that something in the loan application falls outside the criteria of automatic approval and the expertise of the underwriter is required to identify the borrower’s financial strength in other areas to compensate for the gap identified. Mortgage processing outsourcing companies have a team of experts who have the experience of manual underwriting. They make use of the software and add their own inputs to complete the underwriting.

Speed & Accuracy of Processing

As the underwriting process is now a blend of automated approval along with a referral to manual underwriting, technology has made the process faster while a combination of technology and human intervention has resulted in increased accuracy level.

Better Customer Retention

As outsourced mortgage processing companies are being able to complete the Underwriting process at a faster pace with higher level of accuracy, it has resulted in an improved customer satisfaction. A happy customer is the best advocate for any company. Hence lender organizations are being benefited by this.

Higher Scalability

With a mortgage loan processing company as partner, lending organizations are now being able to take in more work resulting in an increase of profitability.

Cost Effective

The lending organizations are finding hiring the mortgage underwriting services to be cost effective as they are not having to spend on hiring expert manpower and invest in expensive software and infrastructure.

Conclusion

Year 2020 has seen a leap in use of technology and the mortgage underwriting process has also changed from its earlier manual state to its current automated state. Lending organizations are embracing this technological advancement by opting for outsourcing mortgage underwriting processes.

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