Texas Lender Doubles Underwriting Productivity with Automation and Streamlined Process

The Brief

• Client Profile: The client is a residential mortgage lender operating in the Texas region.
• Industry Domain: Mortgage lending
• Challenge Faced: The client struggled with a substantial loan backlog, exacerbated by missing and inaccurate data such as income verification, employment history, property valuations, credit scores, and loan-to-value ratios in their loan application files. This critical data gap severely hindered underwriting productivity, leading to extended processing times, increased loan rejections, and declined overall loan quality.
• Project Objective: The objective was to optimize the underwriting process by automating time-consuming tasks and streamlining workflows. This would accelerate loan approvals, enhance overall loan quality, and ultimately boost productivity.

The Solution

By partnering with Backoffice Pro (BOP) and implementing MSuite, the client significantly optimized their lending process through the following key strategies:

• Automated Loan File Indexing: The automation simplified and expedited loan file organization, reducing manual workload and errors.
• Data Extraction and Validation: It ensured accurate and reliable data collection, minimizing discrepancies and enhancing data integrity.
• Enhanced Lending Decision Analysis: It guaranteed the inclusion of two years’ employment and residency history, improving the depth and quality of lending decisions.
• Credit Capacity Assessment: It used existing income calculation requirements to accurately determine credit capacity, leading to more precise credit evaluations.
• Support Property Value: Ensured property values were based on legitimate comparables, enhancing the reliability of property assessments.
• Customer Data Accuracy: Developed focused questionnaires to verify customer information, ensuring data accuracy and completeness.
• Identify Red Flags: Highlighted issues requiring further investigation, enabling proactive risk management.
• Special Guidelines Review: The BOP team examined every loan file by a dedicated team to ensure compliance with particular guidelines, regulatory adherence, and reduced risk of non-compliance.

The Outcome

The implementation of BOP’s specially devised solutions yielded significant benefits for underwriting operations:

• Streamlined Review Process: It significantly reduced the amount of information each underwriter needed to review.
• Enhanced Productivity: Underwriting productivity doubled within three months, increasing from 2 files to 4 files per underwriter.
• Faster Turnaround Times: Underwriting turnaround time was reduced by approximately 40%.
• Home Loan Growth: There was a significant boost in home loan growth, with nearly $5 million in additional loans within six months.
• Cost Efficiency: Operational costs saw a nearly 40% decrease.