19 Feb

3 Key Aspects of Mortgage Servicing Audit, Automation and Scalability

Mortgage Servicing Audit

All of us know that compliance will remain big challenge for mortgage providers. Among growing per-loan expenditure, always altering investor strategy and the Consumer Financial Protection Bureau’s hard work to remove bad players, the difficulties looks so huge that it can be challenging to figure out how to handle.

We consider following are three most important things that need to be taken care of to run business smoothly.

1. Continual Operational Audits:

For most of the small and mid size mortgage providers, the idea of one operational risk audit seems frightening. Operational risk audits helps mortgage providers to know possible threats that may prowl under their processes and practices. It also detects process inefficiencies that can result in cost saving and improve business.

At its heart, an operational risk audit allows a mortgage provider to put together a compliant business while decreasing exposure to future risk. It also offers an opportunity to resolve current issues before they become shoddier. It’s precautionary method, and with the correct assistance, it’s not complex.

Operational risk audits can be divided into three simple parts:

  • Evaluating present procedures and finding any possible threats
  • Ranking every threat according to austerity and possible effect
  • Building and executing a threat alleviation plan

We keep operational risk audits in first of our priority list as they are the most vital aspect mortgage provider should take care to evade problem. The best method is to search a service vendor that has capability to audit for mortgage providers. If the vendor is conducting audit to other mortgage providers then they will have skill and knowledge base of outcomes to take out from. However, the service provider should have capability to offer tailor made solution to mortgage provider as per their unique requirements.

2. Automation:

Mortgage providers are encountering always increasing per-loan cost that is only expected to get eviler if they carry on fulfilling regulatory guidelines by just appointing extra workforce. Some mortgage providers are taking advantage of technology to the core as there is large number of mortgage process that can be automated with the help of appropriate technology implementation. There are many process automation solutions are available in the industry. Mortgage provider should be careful while picking the solution for themselves. They should find appropriate solution for appropriate process automation while keeping their own unique requirement in mind.

Process automation is one of the key aspects to run lending business. The appropriate amount of automation execution with excellent procedure quality can bring loan file error below one percent, provided automation has been executed correctly. It also reduces turn- around time for important procedures by thirty three percent.

Higher degree of information accessibility and transparency is another value that automation brings. It makes fulfilling regulatory guidelines much simpler. Right technology has capability to quickly go through digital files to detect any mistakes or discrepancies. There is no need to appoint extra workforce to go through each line of various pages of documents to identify errors. Moreover, it takes much more time compare to automated process. Automation brings quickness, correctness and assurance that mortgage providers will require in coming years.

3. Scalability:

It’s not possible to forecast on number of people buying home in a particular year. As lenders cannot predict the precise number, mortgage providers should have scalable process that can be used on the basis of business requirements. But scalable process should have feature to scale up or scale down without lowering quality of operation and client servicing. If mortgage providers are not prepared, a sudden growth in origination can unsettle compliance procedure. It would lead to further risk.

Outsourcing service providers offer the flexibility and scalability they require at expense they can manage to pay for. Many outsourcing service providers offer flexibility in pricing by adopting pay-as-you-go pricing models. Service providers also offers 24/7 customer care service that helps mortgage provider to have quick response time.