The mortgage industry has enjoyed a decade-long period of prosperity. Following the housing crisis and subsequent Great Recession from 2008 through 2009, historically low borrowing rates prompted first-time buyers to purchase homes, existing homeowners to trade up to ever-larger abodes, and millions to refinance their mortgages to low-rate 15-year and 30-year fixed-rate loans.
But now, rising rates are dampening demand for all types of borrowings, including mortgages, consumer loans, and commercial and small business loans.
After reaping the rewards of low rates and a hot real estate market that has generated massive refi and new loan business for years, lenders are now facing an extended period of relatively subdued origination volume.
This slower pace of activity makes it an ideal time to conduct a full operational review and identify opportunities to streamline procedures, eliminate bottlenecks, reduce manual steps, and evaluate the costs of loan origination, servicing, and portfolio management.
Many lenders are seeing the benefits of workload automation in their loan origination, servicing, and portfolio management processes. According to Experian, more than 70% of organizations have adopted AI and machine learning to enhance their credit risk management, fraud prevention, and customer experience. In addition, three out of four were in the process of improving or rebuilding their analytics models.
By implementing automation throughout the loan life cycle, lenders will embed greater efficiency, cost savings, and risk management into the process, ensuring they are best prepared for the next upturn in lending activity.