Due to ongoing high interest rates, 2024 has been a challenging year for homebuyers and housing professionals alike. With fewer purchase loans and refinances to go around, many lenders are reassessing their growth strategies.
One way mortgage lenders can grow their businesses is by leveraging the right tech solutions. From AI to automation, advanced tech tools can speed up turn times, uncover opportunities for repeat business, and empower lenders to provide the best borrower experience possible.
So, how can you reap these benefits? Below, we’ll explore three ways to use technology to grow your business this year and highlight some powerful solutions along the way.
Table of Contents
#1 Automate Repetitive Workflows
Automation has already transformed many industries, including mortgage lending. In 2023, over 80% of surveyed respondents said that automation was indispensable in optimizing their operations and ROI.
Automation can streamline many steps within the mortgage lending process, including:
Prequalification
The first step to growing your business is attracting more leads. Offering prequalification is an easy way to bring more prospective borrowers into your sales pipeline. And thanks to automated solutions, like Cascade Prequal, prequalifying applicants has never been easier.
Cascade Prequal compares applicants’ submission data to your credit thresholds, generating prequalification responses in seconds. All you have to do is specify your eligibility criteria and invite leads to apply for prequalification on your website.
Verification of Income and Employment (VOE)
Manual VOE involves a lot of moving parts, from requesting applicants’ paperwork to contacting their employers. Automated VOE, on the other hand, is much more simple and efficient. With our automated VOE solution, Cascade VOE, you can initiate verifications in a few clicks. This savvy solution will take care of the rest, cycling from one third-party vendor to the next until the verification is complete.
You can customize your cascade with:
- Instant-hit vendors, such as The Work Number and Experian Verify
- Consumer permission providers, like Experian Consumer Permission Data
- Certified Credit’s manual VOE support team
In many cases, your verifications will only take a few minutes. When they take longer, this set-it-and-forget-it solution will work behind the scenes as you attend to other areas of your loan origination and alert you as soon as your verification is complete.
Learn More: 6 Benefits of Integrating Consumer Permission VOE into Your Cascade VOE Flow
Undisclosed Debt Monitoring
Along with expediting tedious tasks, automation can also serve as your “second set of eyes,” scanning your applicants’ credit reports for problematic credit activity leading up to their closing date. This is the purpose of Cascade Undisclosed Debt Monitoring (UDM).
This automated credit monitoring solution keeps tabs on your borrowers throughout the quiet period. You can customize what types of credit activity you receive updates about. After that, you’ll be notified as soon as an applicant does something that may jeopardize their debt-to-income ratio or loan eligibility.
Cascade UDM’s blindspot protection can provide you with immense peace of mind. More importantly, it can prevent surprise fallout or repurchase demands upon closing, giving you and your borrowers a better lending experience.
Lead Generation and Borrower Retention
In addition to originating loans, many lenders spend a lot of time on lead generation and borrower retention. After all, they need a steady influx of business to stay profitable.
While attracting new leads is necessary, you don’t need to do it on your own. Automation can take care of that task, too. For example, Cascade Alerts can search for relevant opportunities for repeat business on your behalf, whether you’re looking for:
- HELOC or home equity loan candidates
- Borrowers facing looming rate buydowns
- Prospective refinance or adjustable-rate mortgage applicants
Cascade Alerts works by scanning the credit reports of borrowers within your current database. Once it identifies leads who meet your qualifications, it can let you know within 24 hours.
Property Valuation
When evaluating an applicant, the market value of their chosen property may sway your decision. While in-person appraisals can be expensive, time-consuming, biased, or fraudulent, automated valuation models (AVMs) pull from extensive property records to deliver accurate estimates in seconds.
AVMs can help you evaluate applicants’ properties early on to ensure their loans are worth pursuing. AVMs are even more useful when it comes to HELOCs and other second mortgage products – these automated estimates can eliminate the need for traditional appraisals entirely.
Learn More: How AVMs Can Supercharge Your HELOC and Second Mortgage Growth Strategy
Benefits of Mortgage Lending Automation
As you can see, automation has a wide variety of use cases within mortgage lending. No matter the application, automation brings the following benefits to your workflows:
- Enhanced efficiency
- Cost savings
- Improved accuracy
- Labor allocation optimization
- Streamlined borrower experience
#2 Take Advantage of Artificial Intelligence (AI)
This year, 83% of mortgage lenders plan to increase their investment into AI, and for good reason. AI algorithms analyze vast amounts of data, identify notable patterns, and
make data-backed predictions with more speed and accuracy than a human statistician.
Here are five ways AI can expedite your mortgage lending business growth this year:
- AI can speed up underwriting – Mortgage underwriting is an intricate process with a lot of moving parts. Fortunately, AI can efficiently analyze a wide array of factors for you, whether you rely on Fannie Mae and Freddie Mac’s AI-powered underwriting systems or one of your own. By outsourcing underwriting to AI, you can make faster loan decisions and satisfy borrowers’ growing need for speed.
- AI can predict risk in your portfolio – Once you’ve approved an applicant and closed their loan, you may be tempted to put them out of your mind. However, your borrowers’ future behavior can have serious impacts on the health of your portfolio. That’s where AI can help – it can monitor your borrowers’ credit reports for potential red flags, from increasing inquiries to trending late payments. Using predictive analytics, AI can also determine which borrowers present the greatest risk, enabling you to focus on them first. If you want an AI-powered tool with these capabilities, look no further than Portfolio Review.
- AI can pinpoint potential opportunities – While AI is quite adept at identifying signs of risk, it’s equally skilled at sussing out potential growth opportunities. For example, Portfolio Review can analyze your borrowers’ credit reports to see which ones may be in an ideal position to consider a HELOC, home equity loan, or refinance in the near future.
- AI can improve your fraud prevention – It’s estimated that mortgage fraud affects 1 in 134 applications. Wasting time on these fraudulent applications can set back your loan origination and slow down your growth goals. Unfortunately, many signs of mortgage fraud can be difficult to detect. While humans may be successfully misled, AI is much better at detecting fraud without human bias getting in the way. If you want to strengthen your fraud mitigation with AI, check out our suite of fraud prevention solutions. Learn More: Mortgage Fraud Trends & Why It’s So Hard to Detect
- AI can make your business more inclusive – In the next two decades, Hispanic homeowners are projected to make up 70% of new borrowers. One in four of these applicants will complete their lending process in Spanish. If you want to secure your slice of this burgeoning business, you need to tailor your services to Spanish speakers. Along with hiring some bi-lingual loan officers, you can ask AI to translate your educational content and lending contracts to your borrowers’ preferred language. Learn More: The Hispanic Housing Market: The Future of Homeownership
While AI can elevate everything from your decision-making to your diversity initiatives, it can also streamline your loan officers’ workloads. With more time on their hands, your team can reserve their workdays for value-added tasks that require a human touch, such as enhancing the quality of your customer service.
#3 Select Tools That Employ API Integration
These days, there are many products out there that feature automation and AI, but not all of them are made equal. Along with choosing a vendor partner you trust, you should select solutions that allow for easy integration.
API integration enables different software applications to communicate and share data with one another. At Certified Credit, many of our tech tools can integrate with your chosen loan origination system (LOS), making it easy to access their data and receive notifications within your LOS. Thanks to this seamless information exchange, you don’t have to deal with problematic data silos when implementing our solutions.
Modernize Your 2024 Tech Stack With Certified Credit
Advanced mortgage lending technology can streamline your workflows and shine a light on strategic growth opportunities. Better yet, it can free up your time so you can deliver an exceptional borrower experience.
Need help choosing the right mortgage lending solutions? Allow our workflow optimization experts to assist you. Having worked with countless mortgage lenders across the country, we know how to pinpoint the most pressing bottlenecks in your current processes and prescribe cost-effective solutions, such as:
- Affordable credit reports
- Automated workflows
- Credit score improvement tools
- Property and valuation support
- Fraud and risk mitigation
- Flood zone determinations
- Underwriting compliance
- Settlement services
By upgrading your tech stack today, you’ll be ready to handle a future influx of business when the market improves.
Eager to scale up? Schedule your credit consultation with Certified Credit today.
Learn More: Technology & Innovation: The Keys to Growing Your Mortgage Lending Business in Tough Markets
