Study Finds Value in Post-Closing Automation

A new study, "Closing the Door on Paper-Based Processes," concludes that lenders must focus on improving operational efficiency as the industry's outlook for revenue growth becomes more challenging.

Specifically, the white paper, prepared on behalf of Hyland Software, concludes, "Paper-based processing is the single biggest operational headache faced by lenders, particularly in the final stages of the mortgage process."

While content and document management initiatives have focused mostly on loan origination, the white paper claims that lenders could benefit substantially from automation of the paper-intensive processes that occur after a loan has been closed and shipped to an investor. Hyland Software is a vendor active in the post-closing and shipping segment of the business.

Lenders need an "enterprise-wide, integrated approach to content and process management" that can support a hybrid environment, so that electronic mortgage lending can be blended into an operation.

The paper cites MISMO (the Mortgage Industry Standards Maintenance Organization) and the electronic registry for tracking beneficial interests in loans and servicing rights, MERS, as factors benefiting the move toward more post-close automation. But "the most significant initiative to date" is actually SMART Docs, the development of XML and HTML based documents that make it easier to read and reference data within a document, according to the paper.

The white paper says that adherence to MISMO data standards can save $249 per loan and improve execution costs in the secondary market by around $450 per loan.

The study notes that loan files can contain up to 350 pages in some cases, complicating delivery and shipping to buyers, investors and servicers.

Hyland cites a number of its OnBase clients as saving considerably on auditing, sorting, prepping and shipping costs through document automation. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com