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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2013

Getting Your 1’s and 0’s in Order

Mortgage companies that don’t embrace technology may risk falling behind

Getting Your 1’s and 0’s in Order

With rapid advances being made in e-mortgages, mobile devices and electronic-documentation processes, technology is a topic that mortgage brokers and originators must follow with unflinching focus. To ignore technological developments is to spell potential disaster for your business, and it can pay particular dividends to take special note of the industry’s most pertinent tech advances. Cloud-based technologies are growing in popularity, but what other technologies are on the industry’s mind?

As the mortgage industry and its consumers’ needs continue to change, mortgage brokers and originators must ensure that their origination technologies are current and equipped to evolve in the future. To do that, decisionmakers should look for several key technology features when evaluating solutions to use moving forward. In particular, mortgage organizations should consider the following five areas.

Electronic documentation

Mortgage origination involves the movement of loan documents between multiple parties. Traditionally, this has meant the copying and shipping of real paper files. Paper-based processes in mortgage lending include the receipt of applications, disclosure management, submission of loans from branch offices or third-party originators to centralized underwriting, verification of documents and data for completeness and correctness, the sharing of documents with service providers, dealing with changes at closing, and finally, the packaging and delivery of loans to investors. Being paper-based, these processes can be slow, inefficient and prone to errors.

Today, however, with imaging and document-management solutions, mortgage files can be replaced by electronic loan folders and processed electronically from start to finish. Imaging technologies offer a collaborative workspace so that originators, underwriters and third-party service providers can work together to complete documents and stay current with the status of each form.

A document-management system eliminates the inefficiencies that often are involved with handling paper loan files. Paper-based processes are re-engineered into secure, reliable online workflows. The results of this include higher productivity, lower costs per loan, less waste, reduced errors, higher-quality loans and better compliance.

Separate imaging

Some mortgage organizations use a loan-origination system (LOS) that provides built-in e-folders with document-management capabilities that may be good enough. Innovative, tech-savvy organizations, however, use an imaging system that is separate from their LOS.

By doing so, they can take advantage of the advanced capabilities available in a top imaging solution, such as powerful, high-capacity image conversion and automated document recognition (ADR). With ADR, mortgage documents also are automatically separated, recognized, named, filed and sorted for the user.

In many cases, this technological solution significantly improves the efficiency and accuracy of lenders’ business processes. Further, in addition to providing these advanced capabilities, a stand-alone imaging solution — unlike an LOS — can serve as a permanent repository for document images, even as a given bank or brokerage grows and changes its LOS.

The cloud

In almost all industries, companies now are taking advantage of cloud technology, as the benefits of this innovation can be compelling. Cloud-based solutions make it possible for lenders of all sizes to take advantage of the sort of software technologies and information technology (IT) infrastructure that were previously available only to the largest businesses. Enterprise-class performance, high levels of reliability, data backup and business continuity, dependable security, and the latest in software functionality are now within the reach of any lender at a reasonable monthly cost without a large upfront capital investment.

Cloud-based solutions offer particular benefits for mortgage lenders and solve a number of industry challenges. By their nature, cloud-based solutions foster a level of sharing and collaborative workflow, both within an organization and with customers, vendors and investors that is difficult to achieve with older on-premises solutions.

In addition, security is improved with the cloud because sensitive information is protected. With cloud-based technology, documents and important information are not at risk for being lost. All information stays within the cloud and ensures that personal data is available only to authorized parties.

Finally, cloud-based systems provide convenience. They enable users to access their information from different locations and on different devices. Whether from a browser, a desktop application or a mobile app on their smartphones, users can access cloud-based documents and information whenever and wherever they need to.

Mobile technology

Related to this, mobile apps give mortgage professionals the ability to access their cloud-based information from their smartphones or tablets. This in turn finally allows loan officers to collaborate effectively and in a timely manner with an organization’s back office.

Mortgage banks and brokerages that have yet to fully implement mobile technology among their employees certainly should consider the benefits of doing so. For instance, up-to-date documents and status information are available at any time from any location. When unexpected events come up, isn’t that exactly when you need to access that document that you left at work?

Every important component of mortgage technology should have mobile access moving forward.


Although many mortgage banks and lenders have embraced electronic mortgages, others have yet to take advantage of this recent innovation. Simply put, mortgage companies who do not offer the emerging e-mortgage process are missing out on its many benefits, and this may prove detrimental in the future.

E-mortgages make the origination process completely electronic. The truly paperless process has distinct benefits for all parties involved. For instance:

  1. Loan packages are no longer stacks upon stacks of forms. These forms are replaced by an entirely electronic imaging solution.
  2. All processes involved are more secure, efficient and compliant.
  3. The resulting financial assets are tradable in a purely electronic form. This makes trading between mortgage companies and secondary-market investors fast, easy and seamless.
  4. The experience for all participants (closing agents, investors, auditors and borrowers) is completely online.

As the popularity of e-mortgages continues to grow among consumers, its implementation among mortgage bankers and lenders should grow, as well. As with all technology, the organizations that don’t embrace this development may risk falling behind the curve.

•  •  •

Emerging origination technologies have distinct features that solve industry challenges. Any lender still manually completing paper forms is missing the opportunity to move from the old way of lending to what now is expected of them from borrowers.Insucha rapidly changing industry, the mortgage companies that embrace technological developments may prove to be the most adept at surviving — and thriving.  

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