Innovating Mortgage Loan Origination System with Artificial Intelligence

By inflooens on December 7, 2020

innovating mortgage loan origination system with artificial intelligence


Loan Origination System is the most crucial part of the Mortgage Process. The responsibility to collect, analyze, record, and verify lies on the LOS of any lending organization. This is a huge undertaking and only the best loan origination systems can live up to these high expectations. We have discussed Mortgage LOS and it’s features at length in our earlier blog. Fintech companies have taken it upon themselves to provide a convenient and superior solution to traditional loan origination systems. These new approaches to LOS incorporate the use of cutting-edge technologies like Artificial Intelligence and Machine learning to extend human abilities. In this blog, we will discuss how artificial intelligence is transforming the mortgage industry and giving the best loan origination systems.

Challenges for Loan Origination

Lenders across the globe receive stacks of documents every day in the form of emails, mailed papers, scans, mobile messages, and more. It is a major challenge for loan officers to manually examine, classify, and then record all this data in the loan origination system. Many times the same customer might send different documents through different channels. One paper might be mailed while the other may be shared over the phone. This can cause a huge problem while manually entering the information in the loan origination system (LOS). It may increase the chances of error and data redundancy. Not to mention the amount of time and efforts that the loan officers need to invest.

There are also challenges related to document verification and completion. There can be times when the documents sent by borrowers are incomplete, like missing signatures or missing pages. In this case, the LOS would rely very heavily on the individuals involved in the loan origination which can delay the entire mortgage process. With hoards of documents to be processed every day, the problem of documentation keeps on multiplying, and this cannot be the best loan origination system for lenders' benefit.

Another issue in document processing for loan origination is the format. With multiple channels come multiple formats like PDF, TIFF, JPEG, etc. Sometimes these pages might be in low resolution and difficult to read. It is an expensive option for financial institutions to keep on pouring additional resources to sort, read, analyze, and record all this information. But it is also not an option to overlook these tasks as the data recorded in the loan origination system is the basis for mortgage processing.

mortgage loan originations in billion us dollars

Mortgage Loan Originations in Billion US Dollars Image Source

FinTech to the rescue of Loan Origination System

Realizing the need for fast service and instant results, FinTech companies are disrupting the mortgage industry. To deliver faster turn-around times for loan origination there is competition to provide the best mortgage loan origination system in the market. In an industry where having information at your fingertips is becoming the norm for staying relevant, FinTech innovations are incorporating Artificial Intelligence to automate mortgage processes. inflooens has designed the best mortgage loan origination system that is reliable and empowering and is transforming the mortgage lifecycle.

Artificial Intelligence in Loan Origination

Let’s start with understanding the difference between machine learning and AI. These terms are used interchangeably, but there is a distinct difference. Machine learning is a branch of AI where the knowledgeability of AI is increased. For example, an AI-powered LOS can review thousands of documents in a small time frame and record the necessary data. But to detect an irregularity, AI needs to learn with feedback and information to separate right from wrong in loan origination documents. Once the machine learns with feedback it can apply the same logic to all future documents. This is Machine Learning. It also plays an important role in providing data and insights that can then be leveraged to make informed business decisions.

The best loan origination systems are those that automate manual tasks using AI to reduce human effort, processing time, and costs. According to an industry survey by Fannie Mae, financial institutions adopted AI to improve operational efficiency and enhance the customer experience. One of the leading applications of AI/ML was in Loan Origination and Underwriting process. Using artificial intelligence the loan origination system can work with limited human intervention. This helps in making the loan origination process error-free, fast, and paperless. inflooens is a reliable and efficient platform that gives the best loan origination system to meet all these requirements.

mortgage industry exploring alml

Image 2 - Mortgage Industry Exploring AI/ML Image Source

Costs and Time Reduction with AI in LOS

The best loan origination system overcomes the biggest hurdles of high cost and cycle times. With AI, LOS can quickly read, comprehend, and analyze documents at scale. Fintech is hard at work to ensure that activities take just seconds compared to hours with manual labor. With advanced LOS and emerging technologies, loan officers and underwriters can dedicate more time to providing a more personalized customer experience.

Information at your fingertips

What makes the best loan origination system is the ability to make information available to loan officers and sales teams across markets in an instant. AI can help in managing vendors, indexing documents, and also provide recommendations throughout the loan origination process. With fintech exploring more opportunities with AI such as voice integration, it is only a matter of time when interactive LOS will be in the palm of every lender. These LOS will be discoverable and easy to use through integration with virtual assistants like Siri, Alexa, and Cortana.

Enhancing Customer Experience

Fintechs focus on using AI to create the best loan origination systems with the final objective of enhancing customer experience. In such cases, LOS can be used to give targeted recommendations that provide a more personalized customer approach. Financial institutions can leverage AI and LOS together to engage a customer by answering queries, guiding them through the application process, and offering the right advice during loan origination.

The Future of AI in FinTech

AI has already begun to make its mark in providing the best loan origination systems that the mortgage industry is seeing. There are endless opportunities to be explored and FinTech companies are providing innovative solutions for loan origination every day. This also means that skill sets suited to the use of AI in LOS will be something that lenders will look out for while hiring professionals. The selection of the right mortgage LOS platform will go a long way in ushering in this new era of the mortgage industry. inflooens is a front-runner in this game with reliable and efficient loan origination systems that are transforming the mortgage industry.

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