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Two weeks ago, LoanLogics took part in MBA Annual 2020, as we do each year. Many of the sessions, as well as conversations in our booth, discussed overcoming the unique obstacles of 2020 and forward-looking strategies for 2021.
Wanting to take a temperature reading of opinion during this unique time, we featured a short market survey in our booth. Below we share insights from four very relevant and timely questions asked of attendees who responded.
Has your organization invested more in automation technology due to the pandemic?
Particularly this year, an organization’s success was directly tied to the level of automation in place. Those with it enabled faster, more nimble responses. Seventy-three percent of respondents to our opinion survey, of which 56% identified as executive management, said their organization spent money on technology solutions to plug gaps the pandemic surfaced.
This trend and the need for investment in mortgage technology was also echoed by a panelist during Wednesday’s breakout session “Business Operations Track: Talent Acquisition, Retention and Rightsizing for 2021.” In it they shared that their company has expanded their technology budget 2-3x what it previously was and advised others, who haven’t done so already, to adjust theirs in the same direction- upwards.
Only 15% of our survey respondents stated their investments stayed the same in 2020 and 12% said they were not sure of their organization’s investment.
Do you think your investments in automation technologies will increase in 2021?
The adage “hindsight is 2020” has never rang truer. Unless you had a crystal ball, or your organization was bold enough to invest in technology during a lull in the action back in 2017, 18, 19, continued expansion of automation is in the critical path for 2021 across all channels.
In the MBA Annual breakout session, “Business Operations Track: The COVID-19 Servicing Response, one panelist shared her organization was and is well positioned to manage emerging loss mitigation efforts with their borrowers because of technology investments they made when numbers were not spiking. She went on to say many even questioned why they were investing when they did, but now that investment is paying off.
With hindsight 2020, 68% of our survey respondents said their organization intends to invest more in automation in 2021, with only 12% stating it would stay about the same.
Do you think loan defects have increased with the recent rise in volume?
Void of automation, transparency and accuracy suffer. This of course then has a ripple effect across loan quality, translating into higher risk and potential loss of profits for mortgage businesses. Few would challenge this notion.
Even with this knowledge, STRATMOR Group and MBA presented a chart during the same “Talent Acquisition, Retention and Rightsizing for 2021 session” mentioned above, showing technology investments, while on the rise in recent years, remain comparatively small to other organizational costs. Large bank spend is hovering around 16% with other financial institutions between 4-10%.
The good news is these investments have helped to increase the quality of mortgage lending and put the industry in a much better position to address the environment we faced this year. While the majority of our survey respondents didn’t know how quality may have been impacted by rising volume (something that really should be understood), only 18% of our survey respondents said defects rose. On the other hand, 38% indicated they decreased or remained the same. Perhaps providing evidence of the value of continued investments in quality automation.
Automating document intake and data entry can drive efficiency. Which area of your business could benefit most from this? (Check all that apply).
STRATMOR Group also revealed that 1 in every 5 loans, or 20%, currently fail to meet borrower expectations related to time to close. What’s even more worrisome is this problem has gotten twice as bad since the start of the pandemic (March/April). The introduction of more technology earlier in the process can help to streamline processes and potentially shorten time to close. LoanLogics has talked a lot this year about the need for in-line real-time doc processing with accurate classification and data extraction to alleviate some of the inefficiency and bottlenecks in loan production, as well as in other mortgage channels and use cases. The April release of IDEA™ OnDemand, a digital assistant for doc processing delivered that to the market. Our blog and website continue to be a vehicle for that message.
Like the diverse mix of survey respondents’ roles and responsibilities, responses to this question reflected a similar distribution for the need for more doc processing automation across channels. Origination received the most votes at 62% with the servicing channel coming in second with 35% of votes. Finally, 26% of respondent’s correspondent channels were flagged with a need for better doc processing and another 15% of respondent’s wholesale channels.
This year has certainly been like no other. MBA Annual was a great way to get “under one roof,” the conference theme, and talk about all the successes and challenges experienced in 2020. These important conversations and mortgage insights will ultimately set the stage for 2021.
From data purification to equipping your physically distributed teams with tools to automate document processing and loan quality audit workflows, LoanLogics is innovating across the mortgage life cycle.
Connect with us today to understand how we’re making:
- Human capital more efficient
- Operations more scalable
- Loans defect free
