The COVID-19 crisis has struck every industry, and the mortgage sector is no exception. While lenders are quite keen to keep their existing customers comfortable, the new applicants might be facing considerable delays and uncertainty with their applications.
Since regular business activities cannot be conducted due to the prevailing restrictions in North America, the lending companies need to adapt and redefine their policies, particularly from the regulatory standpoint. This is yet another factor contributing to the lag in processing mortgage applications.
Moreover, even existing customers are facing problems in making their mortgage payments because of the unemployment crisis. In an attempt to facilitate the masses, the U.S. government announced the CARES Act, thus pushing the lenders to accept payment delays for up to 360 days on certain mortgages. The Canadian government announced a similar program through the Canadian Mortgage and Housing Corporation (CMHC) to delay mortgage payments for up to 180 days but left the decision to the lenders. While it sounds like an excellent opportunity for the borrowers, the long-term impact may have a lasting effect on the housing market.
When we talk about increasing your mortgage lending capacity, it all comes down to bringing automation into the processes. Let’s take underwriting as an example here.
Considering this situation, it might take several days and even weeks to process new applications. Since there are several factors to be considered during the underwriting process, and there are tens of documents per applicant, it is wise to pursue an AI-based solution that automates the underwriting process. These solutions should be equally beneficial for all types of mortgage providers, particularly those who are short of resources due to limited or furloughed staff or reduced budgets.
Please be advised that these tools provide industry-level risk management and enables you to define an end-to-end mortgage approval strategy. Thus, removing the dependency on manual processing. Both parties (lenders and borrowers) can autocomplete a variety of tasks at their end in an efficient way to ensure the delays are avoided (or at least minimized), and regulatory conditions are also met. As a result, lenders do not have to worry about the delays, and the customers can also enjoy a seamless experience.