As a mortgage lender, your top priorities are providing exceptional service and attracting new clients. However, balancing these priorities can be tough, especially if you don’t have the right tools.
From helping you generate new leads to strengthening your underwriting process, many mortgage lending tools can instantly upgrade your business operations. So, what are the most valuable tools to invest in this year?
Below, we’ll review nine must-have tools for modern mortgage lenders and explain how they can help you achieve better results in 2024.
Table of Contents
#1 Automated Lead Generation Software
Considering that only 18% of borrowers stay with the same loan provider post-refinance, cultivating a loyal client base can be a challenge. To prevent losing the majority of your hard-earned business, you need a tool that can help you monitor your clients’ credit activity and alert you when they’re searching for a new mortgage. This way, you can reach out before they give their business to a competitor.
At Certified Credit, we have the ideal solution: Cascade Alerts. This automated credit monitoring tool serves as a dedicated, 24/7 lead generation assistant, scouring your existing borrower database for potential prospects. It does so by monitoring your borrowers’ credit activity for signs that they may be in the market for a new mortgage product. Cascade Alerts shares its lead notifications within 24 hours, giving you plenty of time to proactively position yourself as the best lender for the job. Your lead lists can be sent to your phone, email, or LOS.
To streamline your lead generation even further, Cascade Alerts allows you to customize your eligibility criteria so you only receive qualified leads in your inbox. As a result, it can also help you identify:
- Primed HELOC or home equity loan candidates
- Borrowers facing looming rate buydowns
- Applicants who may be interested in adjustable-rate mortgages
Learn More: How to Protect Your Portfolio and Retain Borrowers Amid 2022 & 2023’s Rate Buydown Expirations
#2 Automated Prequalification Software
While Cascade Alerts can prequalify past and present borrowers on your behalf, you’ll most likely attract an influx of leads from other sources, as well. Thus, you need a way to see if they meet your basic eligibility criteria.
That’s where Cascade Prequal can streamline your workload. This convenient solution can prequalify leads on the spot by comparing their submission data with your pre-set credit thresholds. In turn, your applicants can enjoy swift responses while you let automation do all of the heavy lifting.
The best part? Cascade Prequal’s data will automatically populate within your LOS, enabling you to review applicants’ data at a later date.
#3 Customizable Credit Reports
After prequalifying your applicants, you can get a more comprehensive view of their creditworthiness using mortgage credit reports. While credit reports are an essential mortgage lending tool, it’s important to note that not all credit reports are built the same.
At Certified Credit, our customizable reports are designed to give you a clear view of your applicants so you can assess their risk accurately and efficiently. Here are just a few of the credit reporting tools we offer:
- Tri-merge reports – Learn about your applicants from all three credit bureaus.
- Soft pull reports – See who prequalifies with you without impacting their credit score.
- Smart Select reports – Customize credit reports based on your unique criteria.
- Refresh credit reports – Ensure a seamless closing process and prevent loan fallout.
- Business credit reports – Gain valuable insights into applicants’ business accounts.
- Mortgage-only credit reports – Hone in on applicants’ mortgage histories.
- Mortgage comparison reports – Compare credit reports and identify their differences.
With a complete collection of credit reports at your fingertips, you can swiftly assess applicants’ creditworthiness and approve applicants faster than your competition.
#4 Credit Score Improvement Tools
In recent years, mortgage lenders have faced intense competition due to a limited volume of business. These tough market conditions highlight the need to find creative ways to guide prospective applicants toward stronger creditworthiness.
One way you can boost your approval rate is by providing hands-on support to those on-the-cusp applicants. Doing so is easy with the help of ScoreNavigator. This tool includes:
- Strategic credit score improvement tips – ScoreNavigator analyzes your applicants’ credit reports, highlights which of their accounts require the most attention, and generates personalized action plans to pay them down efficiently.
- Account recommendations – ScoreNavigator’s Recommendations Report generate tailored suggestions for applicants’ positive and negative accounts. Better yet, it estimates how much their credit score will change if they take various actions, from paying down balances to correcting credit file inaccuracies.
- Account alerts – ScoreNavigator’s Account Alerts can notify your applicants when the best time is to make their monthly credit card payments. It can also clarify what balance sizes they should stay below to optimize their credit utilization.
- Ongoing support – With ScoreNavigator’s Extended Financial Action Plan, you can give your borrowers personalized insights about how to handle their credit before, during, and after obtaining their mortgages.
With credit score improvement tools like these, you can close more loans and grow your business without sacrificing your underwriting standards. Additionally, you can position yourself as a trusted advisor for your clients.
#5 Automated Valuation Models
Sixty percent of American consumers claim that their incomes aren’t keeping pace with inflation. While incomes are down, home equity levels are up. This year’s high home prices have caused many homeowners’ equity to skyrocket to record levels. As a result, home equity loans and home equity lines of credit (HELOCs) are particularly attractive to cash-strapped consumers.
If you want to extend these second mortgage products efficiently and compliantly, automated valuation model (AVM) solutions can help. AVMs are a faster, more affordable alternative to traditional, in-person appraisals. They use statistical modeling to estimate the market value of properties. Thus, you can use AVMs to:
- Quickly determine if a property’s value supports a borrower’s prequalification.
- Evaluate loan-to-value ratios before initiating the underwriting process.
- Validate the accuracy of traditional appraisals using a bias-free alternative.
- Conduct post-closing property valuations to assess sale prices.
While AVMs have many applications, they’re particularly useful when it comes to HELOCs, home equity loans, and qualified refinances. That’s because they can satisfy federal and investor appraisal guidelines on their own, eliminating the need for their costly in-person counterparts.
#6 Flood Zone Determinations
Climate change is a hot topic these days, and it has a significant impact on mortgage lenders and other real estate stakeholders. After all, climate change is altering weather patterns in significant ways. This year, the United States experienced more than its fair share of severe weather, including several tropical storms.
This severe precipitation is often followed by flooding, which can devastate properties and put their owners’ and lenders’ investments at risk. That’s why all modern lenders need a robust flood zone determination solution.
At Certified Credit, our up-to-date Flood Zone Determinations can help you:
- Determine if an applicant’s property is located within a FEMA flood zone
- Run quick, no-cost Flood QuickChecks for potential applicants’ properties
- Strengthen your lending decisions
- Obtain flood certificates that comply with FMMA, FHLMC, and investors’ standards
- Promptly notify borrowers about any changes to their flood risk
We offer two versions – Flood Basic and Life of Loan – so you can select the one that fits your needs and budget.
#7 Comprehensive Risk Mitigation Tools
Along with floods, you also need to protect your business against fraud. After all, mortgage fraud is on the rise. From document fraud to straw buyer schemes, these plots can cost financial institutions billions of dollars. Thankfully, 70% to 80% of mortgage fraud is preventable if you employ the right early detection efforts.
If you want to strengthen your risk mitigation, you can do so using the following fraud and risk mitigation tools:
- ADV-120 Fraud Report – Our ADV-120 fraud report offers you instant insight into the fraud risk factors that exist within a mortgage application. These risk factors are based on discrepancies between the application’s information and public records.
- Wire Transfer Fraud Report – To prevent wire transfer fraud, this two-tiered report validates an applicant’s bank account ownership and account status. It also provides you with details about the settlement company that was used for the transaction.
- Liens & Judgment Report – This report searches through public records to find any liens or judgments against your applicants. It’s available in both FCRA and GBLA versions.
- 4506-C Tax Transcripts – This tool enables you to verify applicants’ 1040s, W2s, 1099s, 1120s, 1065s, and other tax documents directly with the IRS.
- SSA89 Verifications – You can verify applicants’ social security numbers with the Social Security Administration using this helpful tool.
- Mortgage Participation Report – This report lets you know if one of your applicants is on any of the government’s mortgage exclusion lists.
- ID Risk Review – This tool summarizes public record data relating to an applicant’s ID to ensure it’s only associated with one person.
- Portfolio Review – By scanning your borrower database, this tool can keep tabs on the health of your portfolio and alert you of potential risks before they impact your profitability.
With so many powerful fraud prevention tools at your disposal, you can protect your mortgage business from unscrupulous actors and enjoy greater peace of mind.
Learn More: 70 Signs of Mortgage Fraud
#8 Undisclosed Debt Monitoring (UDM)
Undisclosed debt can inflate your risk of last-minute loan fallout and repurchase demands. Oftentimes, applicants incur undisclosed debt after getting approved for their mortgage without realizing its implications.
The issue with undisclosed debt is that it can increase applicants’ debt-to-income ratios (DTIs) unexpectedly. An Equifax report found that 36% of borrowers who opened new tradelines between their mortgage credit pull and closing spiked their DTIs by 3% or more.
As a mortgage lender, you don’t want to be the last person to learn about these new liabilities. Instead, you can get real-time intel with the help of Cascade UDM. This solution can monitor your applicants’ credit reports from credit pull to closing and promptly notify you of any new:
- Tradelines
- Credit inquiries
- Late payments
- DTI increases
- Payment changes
- Collection accounts
Cascade UDM’s alerts can be sent via email or LOS integration. Once you receive an alert, you can reach out to your applicant and ensure they restore their creditworthiness before closing.
Since this solution provides continuous credit monitoring, you can skip the process of ordering a Refresh Report upon closing, simplifying your LQI compliance.
#9 Automated Verification of Income and Employment
If you’re still doing your verification of income and employment manually in 2024, you’re wasting time that could be better spent servicing borrowers. That’s why automated VOE software is the last tool on this list.
At Certified Credit, our automated VOE solution is called Cascade VOE. This tool can help you save time and money as you complete your verifications. Here’s how it works:
- You select your favorite VOE providers, whether you prefer instant-hit, consumer permission, or a combination, and arrange them in your preferred order.
- Using its unique rules-based engine, Cascade VOE will cycle through these vendors one by one until it returns a hit. This process typically only takes a few minutes. You can track Cascade VOE’s progress from within your LOS/POS or simply await its notification.
- If your list of vendors comes up short, Certified Credit’s VOE team will complete the manual verification for you. Over 50% of our manual VOEs are completed within two days.
As you can see, Cascade VOE introduces an unparalleled level of efficiency and standardization into the VOE process. By making your VOE costs more predictable, you can pass these costs on to your applicants while adhering to TRID requirements.
As Cascade VOE upgrades your verification workflow behind the scenes, you can reallocate your valuable time and attention to other areas of your business.
Upgrade Your Lending Toolbox With Certified Credit’s Mortgage Lending Solutions
They say a man is only as good as his tools. This rule applies to mortgage lenders, as well. When you have these nine innovative tools in your arsenal, you’ll be able to identify more lending opportunities, capitalize on them, and grow your mortgage business with ease.
If you want personalized recommendations, allow our workflow optimization experts to assist you. They can suggest which tools will offer the best return on investment for your unique processes and growth goals. Ready to get started? Schedule your credit consultation with Certified Credit today.
