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Mortgage Data Capture: Benefits, Challenges & How to Choose It

Mortgage documents contain crucial information about borrowers and the property they want to buy.

Accurately capturing this information from mortgage documents helps ensure that the mortgage lending process runs smoothly for all parties and that lenders don’t run afoul of regulatory requirements.

Manually keying mortgage data is costly, time-consuming, error-prone, and risky.  And capturing the data from mortgage documents only gets more complex as a lender’s volume of documents grows.

Mortgage data capture solutions help lenders automate the process of extracting borrower and property details from documents, streamlining the lending process and mitigating potential risk.

This article details the benefits of deploying a mortgage data capture solution.

The importance of mortgage data capture

The information on a mortgage document is critical to determining a borrower’s eligibility for a mortgage, calculating the loan amount and interest rate, completing underwriting, and assessing risk.

Inaccurate or incomplete data can lead to errors in the mortgage lending process, resulting in delayed closings, customer dissatisfaction, rejections, or even foreclosure.  Moreover, inaccurate data can put lenders at risk of regulatory violations, hefty fines, and reputational damage.  Therefore, capturing accurate data from mortgage documents is critical to the success of the mortgage lending process.

But capturing data from mortgage documents can be a complex and challenging task.  Mortgage documents can contain hundreds of pages of information, making it difficult to manually extract and organize data.  Mortgage documents can be complex and contain technical jargon, abbreviations, and legal terms that are not easy to understand.  Mortgage documents can be inconsistent in their formatting and structure, making it challenging to extract data accurately.  And mortgage documents can vary by loan type, lender, and jurisdiction, making it challenging to standardize data extraction.

These challenges make it difficult to accurately capture data from mortgage documents.

Data that must be captured from mortgage documents

There is a lot of information that must be accurately captured from mortgage documents, including:

  • Borrower details. This includes the borrower’s name, Social Security Number, contact information, and employment information.
  • Property details. This includes the property’s address, legal description, and appraisal value.
  • Loan terms. This includes the loan amount, interest rate, repayment term, and any fees associated with the loan.
  • Mortgage security. This spells out a first or second lien and any collateral that is used to secure the loan.
  • Payment details. This includes the loan payment schedule, payment amounts, and any penalties for late payments.
  • Escrow information. This includes any taxes or insurance premiums that are collected and held in escrow by the lender.
  • Prepayment details. This includes any penalties or fees for prepaying the mortgage.
  • Legal disclosures. This includes any legal disclosures that are required by law, such as Truth in Lending disclosures or disclosures related to the borrower’s right to rescind the loan.

Accurately capturing this information helps ensure that all legal and financial requirements are met.

What is mortgage data capture software?

Mortgage data capture solutions automate the collection, processing, and routing of information from mortgage documents.  Here is an overview of how most mortgage data capture solutions work:

  1. Input. Data is aggregated from scanned documents, email, fax, mobile, and other sources.
  2. Pre-processing. To ensure that the data is clean and ready for processing, mortgage data capture solutions perform de-skewing, noise reduction and document segmentation.
  3. Data extraction. Relevant data fields such as the borrower’s name and address are extracted from documents using optical character recognition (OCR), artificial intelligence (AI) with machine learning, barcode recognition, mark sense recognition, and other technologies.
  4. Verification. To ensure data accuracy, some mortgage data capture solutions apply verification rules to extracted data, such as checking for data consistency and completeness.
  5. Export. Extracted data is exported in different formats to downstream systems, such as a loan origination platform.  Some mortgage data capture solutions use Robotic Process Automation (RPA) to connect systems without the need for computer programming.

These steps streamline the capture of information from mortgage documents.

Benefits of mortgage data capture software

Automating the capture of data from mortgage documents delivers tremendous benefits.

  • Reduced administrative costs. Mortgage data capture solutions eliminate the need for costly manual keying, paper shuffling, and paper storage and retrieval.
  • Increased efficiency. Automating the capture of data from mortgage documents frees up staff to focus more time on higher-value activities, and accelerates cycle times.
  • Better accuracy. Errors are inevitable wherever there is manual keying.  Extracting data from mortgage documents reduces the possibility of typos and transposed numbers.
  • Enhanced customer experience. Faster turnaround, fewer errors, and quick responses to inquiries help lenders improve customer satisfaction and increase customer loyalty.
  • Improved compliance. Automating the capture of mortgage data and standardizing the way it is routed and stored reduces the risk of violating regulations and internal policies.

These are some of the reasons that more lenders are deploying mortgage data capture solutions.

Choosing the best mortgage data capture solution

There are lots of mortgage data capture solutions out there.  Picking the wrong one can set a lender back.  Here are some important considerations for choosing the best mortgage data capture solution.

  1. Assess your needs. Consider the volume of documents you receive, the data fields you need to capture, and any requirements for integrating with downstream systems and processes.
  2. Determine your goals. Collaborate with stakeholders to establish objectives for the project.
  3. Find the right tech partner. Look for a technology provider with a proven track record in mortgage data capture, features and functions that you need, software and hardware that can automate your mortgage data capture process from end-to-end, and an ability to scale.
  4. Don’t overlook ease of use. Lenders cannot afford complex systems that will require lots of staff training.  Look for a mortgage data capture solution with an intuitive user interface.
  5. Strive for seamless integration. A poorly integrated mortgage data capture system results in double-keying of information and back-and-forth emails and phone calls, long after the system has been deployed.  Find a system that is compatible with your legacy systems.
  6. Prioritize scalability and adaptability. Things change fast in the mortgage space.  That’s why it’s critical to deploy a solution that can be scaled up or down as your needs change and can support the full range of formats that a borrower might use to submit loan documents.
  7. Gain peace of mind. Evaluate each mortgage data capture solution towards how it will safeguard sensitive data.  Look for solutions that offer data encryption, user permissions, logging of all actions taken on a document, and instant access to the status of documents.

These considerations will help ensure that a mortgage data capture solution will meet your needs.

Automate mortgage data capture

Accurately capturing the information from mortgage documents is essential to the lending process.  Mortgage data capture solutions streamline the lending process, help lenders deliver a better customer experience, and mitigate the risk of violating regulatory requirements or internal policies.

Ready to learn more about our mortgage data capture solutions? Click here to consult an expert.

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