Over the past few years and across every industry, companies have faced unprecedented challenges and have emerged with new approaches to remain competitive, meet changing consumer demands, and adapt to new innovations and technologies. The mortgage industry has risen to this challenge.
The mortgage business evolved fast over the past couple of years due to a substantial rise in home purchases during the COVID-19 pandemic along with historically low interest rates. Despite the recent uptick in rates, the Mortgage Bankers Association predicts a substantial amount of business during the next two years, with total residential originations expected to exceed $2.2 trillion in 2023 and 2024.
The adoption of cloud services and investments in the right technology have enabled mortgage companies to navigate this significant growth and not only keep up with the current market but improve business operations for continuous long-term growth. Cloud computing involves the delivery of computing services over the internet. Mortgage originators will want to know how investments in these tools can help to better their businesses.
The combined end-user spending on cloud services totaled $270 billion in 2020, and projections indicated that this figure would rise to nearly $400 billion in 2022, according to a Gartner report. The reason for this widespread adoption can be consolidated into three primary benefits: scalability, security and innovation.
As the mortgage industry grew rapidly during the pandemic, companies that utilized cloud-based software were able to scale their business and become future-ready. These solutions gave companies the help they needed to meet market demands and improve workflow efficiency while also reducing time to market.
Specifically, cloud products helped with expediting applications, preventing mortgage companies from losing valuable time on data entry and processing. This allowed them to take on a higher volume of applicants to further increase business. In addition, these products are built to accommodate almost any operation and scale with the business, whether it’s a small lender or a multibillion-dollar organization.
Enhanced security is another benefit of cloud software. While the cloud alone does not address all security and infrastructure issues a company can have, it provides enhanced security compared to a business with only an on-premise infrastructure.
Companies have more control over their data since it is stored, accessed and protected in the cloud. Additionally, companies can be secure in their decisions and data-processing accuracy due to the fail-safe tools built into these cloud-based products. For example, e-closing functionality assists employees in reducing user errors by processing documents, data collection and e-signatures in a seamless and secure manner.
The use of this technology also enhances security by eliminating back-and-forth emails, phone calls and additional requests for updates by connecting lenders and originators directly to vendors through a secure web-based portal. This gives mortgage professionals further peace of mind that their client data is safe in these portals and not exposed in email communications.
Cloud services also emphasize the importance and role of innovation within the mortgage industry, and they provide companies with options that expedite processes. The typical closing time on a mortgage is 50 days, but with advances in cloud tools and other technologies, this time can be significantly reduced, making the process quicker and less tedious for both the homebuyer and the lender.
As a result of technological advancements, mortgage industry leaders have adopted cloud-based infrastructure. They now have access to next-generation closing software that speeds up the process while providing data-driven insights for improved communications and shorter cycle times. These options aim to unite lenders, vendors and escrow companies in order to provide end-to-end visibility throughout the mortgage process life cycle.
To keep up with the flow of refinance and purchase transactions, many mortgage companies work across multiple divisions in multiple states. They also frequently interact with multiple vendor partners from banks, financial-services providers and mortgage institutions. Every closing has multiple moving parts and each one is handled by an integral partner in the transaction.
To increase efficiency, leading companies seek out a cloud-based transaction management platform that includes a powerful and agile vendor ecosystem. The large amount of data that must be processed from the paperwork involved on the homebuyer side can be intimidating. Integrating with the cloud can help streamline the process by eliminating manual paperwork and allowing these documents to be stored, managed and tracked digitally. Automating the process also eliminates the possibility of common manual errors.
Moreover, if mortgage companies want to operate in a secure environment, they will need a strong infrastructure. To do this on their own would require a significant investment, but with a cloud-based system, the infrastructure, security and flexibility are built in. Taking the benefit of flexibility one step further, cloud-based solutions enable companies to set up virtual offices, affording more options for employees as hybrid and remote workforces are expected to remain standard practices for the foreseeable future.
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Cloud-based systems are no longer in the distant future for the mortgage industry. These systems are critical investments in the modern marketplace, accelerated further by the events of the past few years. As cloud-based infrastructure continues to become the norm, mortgage professionals who have embraced the evolution will be in a stronger position for long-term scalability, security and innovation, ultimately resulting in borrower satisfaction and success. ●