New models for loan processing and process-outsourcing could create business efficiencies

Greg Smith, vice president and general manager, Xerox Mortgage Services

As published in Scotsman Guide's Commercial Edition, September 2009.

To overcome the obstacles and survive the industry turmoil, mortgage professionals must face the market realities and work with other market participants to drive costs out of the loan-approval and lending process.

One way the industry is trying to make this happen is through a hosted model for loan processing. Although a paperless, hosted model is not a new concept, full industry adoption is far from complete.

These technological advancements, coupled with smart business decisions, can make a difference in how mortgage players can compete and thrive in today's market.

On-demand is in demand

Software-as-a-service (SaaS) applications allow mortgage professionals to lower overhead costs and enable a greater return on investment (ROI) with quicker deployment times.

Although SaaS solutions are not new to the mortgage industry, they are becoming more accepted because they provide a variable-cost model. The recent volume swings in the commercial market have helped drive this approach's value. The ability to leverage an on-demand application across platforms enables collaboration, improves loan-processing times and increases efficiency.

Through this process, mortgage participants can eliminate innumerable sheets of paper. This enables faster processing and more-streamlined communication with essential business partners. Providing online access to all mortgage participants not only reduces storage, printing and shipping costs, but it also speeds up loan-turnaround times.

There are several benefits of removing paper from the loan process. The best way to transition from relying on paper-based loans is to start with a specific part of the process, such as origination and underwriting. Some companies have been successful starting in the post-closing department and moving the paperless process forward to origination.

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