5 Mortgage Processes Credit Unions Should Automate Today

Credit unions, like all mortgage lenders, are under pressure to meet member expectations for fast, secure and convenient digital experiences across the board. Credit unions must meet and exceed their members’ demands to remain competitive. And to do that, credit unions need to automate the lending process. To help credit unions on their automation journeys, here are five mortgage processes they should automate now:

1. Appraisals

Typically, appraisals are among the longest, most expensive and most essential pieces of the mortgage process. Automating appraisals offers benefits to both credit unions and their members. For example, credit unions can use data analysis tools to analyze such factors as comparable home sales to determine home valuations in seconds, saving their members the cost of hiring appraisers. Automating the appraisal also accelerates the mortgage process, as members don’t have to wait weeks for their credit unions to receive their appraisals.

2. Cross-Selling

As competition for new members is heightened from traditional and non-traditional financial institutions, integrating cross-selling products has become advantageous for creating revenue and increasing member retention. Credit unions are more likely to know their membership base, and there has never been a better time to leverage this knowledge to deepen existing relationships.

Debt optimization is an example of an automated process a credit union can tap into prior to a mortgage loan closing. This automation analyzes a member’s financial data to determine if there is existing consumer debt that can be consolidated or refinanced within the credit union, allowing the possibility of a lower mortgage loan rate or better loan.

While this option may not benefit everyone applying for a mortgage loan with the credit union, there is still an opportunity to cross-sell during the post-closing process. Through the click of a button in the mortgage loan origination system (LOS), the member’s information is automatically populated into the consumer LOS to promote other consumer lending products such as credit cards, pre-qualified auto loans and personal loans.

Collaboration is only possible if credit unions implement automation technology that enables integrated operations. With automation, credit unions can work together across product lines to provide their members with more efficient, top-notch homebuying experiences.

3. Disclosures

Delivering accurate disclosures to borrowers at the right time is a critical part of the homebuying process. As such, credit unions depend on their loan officers to get the closing documents ready and send them to their members. However, relying on humans to complete this step in the process can often result in errors. For instance, credit unions pay the price if their loan officers underestimate or overestimate any of the fees associated with the loans.

Credit unions that automate the disclosure process can send accurate disclosures to their members almost immediately.

4. Document Collection

It takes borrowers a lot of time and effort to manually collect and send the necessary paper documents to their credit unions. From there, credit unions have to deal with the time and effort it takes to manually review the documents their members submit. This takes credit union employees away from their core jobs and increases the loan processing time.

Automating the process of collecting all the necessary mortgage documents helps credit unions cut costs and stay competitive. Automated document collection systems enable credit unions to set up customer portals to process, track, share and collect required documents.

Automation lets credit unions more easily approve documents and allows their members and loan officers to view the status of the applications and quickly approve or revise document requests. Additionally, automation helps credit unions comply with federal, state and industry regulations by providing standardized templates for communication, automated file management and eliminating the need to send sensitive member documents via email.

5. Loan Validation

Data-driven decision-making holds the key for credit unions that want to improve operations and better serve their members. However, manually collecting financial data and other mandatory member data, including government monitoring information, is labor-intensive, time-consuming and challenging to complete. What’s more, the greater the volume of data that credit union employees must enter and re-enter, the greater the risk of introducing transcription errors.

Credit unions can alleviate the delays and inconsistencies associated with manually collecting financial and other mandatory member data by automating data collection. And after they receive this data, credit unions can also create business rules that can automate the next steps in the process.

Ensuring the Right Tech Stack

A key component of automation is ensuring a credit union has the right technology stack in place to support these processes, most importantly a configurable LOS with an intelligent, open application programming interface (API) enabling integrated solutions.

For the processes mentioned, an API-enabled LOS will allow third-party vendors to integrate and assist in providing a point-of-sale platform, optical character recognition and robotic process automation amongst other components.

Automating processes that are repetitive, high volume and require little interaction from employees allows these workers to focus on improving member interactions and developing and using innovative technologies, which in turn drives increased approval rates, grows revenue opportunities and empowers credit unions to create lifelong financial management relationships to support a member’s entire financial journey.

Ian Goldsmith

Ian Goldsmith is SVP of product at MeridianLink, a Costa Mesa, Calif.-based provider of loan origination systems for financial institutions.