Numerous stones hit the mortgage loan processing industry across the world, pushing it in a puddle of doom as during the 2008 subprime mortgage crisis that led to the breakdown of the mortgage-backed security market, but can RPA predict and prevent such a crisis in the future?
Analyzing it, it led to the loss in the range of approximately $5 trillion to $15 trillion globally, based on the research paper “The deeper causes of the financial crisis: Mortgages alone cannot explain it” by Mark Adelson in Journal of Portfolio Management.
Not to forget, there are other impending issues relating to mortgage processing-a reduction in the turnover time, struggles with pre-underwriting, regulatory compliances, creating customer base in foreign lands, and engaging the workforce round-the-year.
There were 14,183 transactions worth 1,19,900 million AED in 2018 in the mortgages, according to the statistics by Dubai Statistics Centre, Government of Dubai on Real Estate Transactions. (Source: Land Department)
The conventional mortgage process is slow and people-intensive in many instances. There’s too much paperwork in mortgage processing-credit checks, insurance statements, inspection reports, employment verifications, and even the slightest error in operational efficiency can cause huge risks for both the buyer and seller. With huge data handling and verification, automation becomes your smart buddy who adds business value! The smart tools have customer-oriented strategies driven by data analytics and what’s more when you can automate the entire loan process?
Here’s how RPA assists in every stage of mortgage processing:
In the loan origination stage that includes pre-funding data verification, pre-funding document verification, ordering services, and workflow management, RPA validates and verifies the accuracy of the information, and flags the incomplete documentation to the loan officers. It can also order services including appraisal, flood insurance, credit, and employment verification.
In the performance servicing stage that includes system stops and holds, index rate updates, complaint analysis, loan administration, Mortgage servicing rights (MSR) acquisitions, customer service/collections, flood calculator, new loan setup, and regulatory compliances, RPA identifies the various scenarios, indexes, key loan attributes, and carries out data aggregation, data inputting, data integrity testing, evaluations, and other analysis, and resolves all discrepancies.
In the default servicing stage that involves invoice processing, claims management, bankruptcy filing, loss mitigation/foreclosure checklists, loss analysis, and reinstallment/pay off calculator, RPA automates documentation, data collection, aggregation, and analysis. It also triggers processes based on key internal or external events in claims management.
In the finance/accounting stage that involves reconciliations, journal entries, accounts payable, and financial analysis, RPA helps in data reconciliation, matches service orders to invoices, and automates payments, gather, and format data from various sources for financial analysis.
Risk and Compliance:#
In the risk and compliance stage that involves automated testing, real-time validation, and built-in auditability, RPA can automate “stare-and-compare” transaction testing, automate controls, and help in audit trails.