Developing a Financial Software That Leads to Faster Approvals
There are a variety of factors that go into consumer approval for loans. Before a financial institution agrees to lend a person thousands of dollars, they want to make sure they'll be able to pay it back. To do this, lenders must collaborate with different parties to get approval for the loan.
The whole process is data intensive and the costs are high. Loan origination costs around $8,000 on average, but that doesn't include regulatory fines if the loan doesn't meet industry requirements. Fines can be millions of dollars if regulators catch missing data or required information in the final document. That's a costly mistake for your clients.
Luckily, your software can help them avoid these financially crippling mistakes. As we've previously discussed in our blogs Adding Document Capture Into Your Financial Application and Adding Form Processing Into Your Application, you can easily integrate ways for your clients to load a variety of file types into one platform, search the documents for data, extract information, and transfer those consumer files through different departments. Let's take a look at how this could be particularly useful in loan origination.
Steps in a Loan Approval
There are so many people involved in the loan origination process before it even gets to approval. When a consumer begins the process, their realtor usually puts them in touch with a mortgage advisor who works with loan officers to collect the information lenders need to approve applications.
The loan officer is the person responsible for ensuring that the consumer is qualified for a loan. Once a credit score is provided and approved, the loan type is selected and the interest rate is locked in. Next, the loan goes to processing. In this department, creditworthiness is approved or denied based on a variety of financial factors including credit reports, job stability, consumer credit history, etc. During this stage, consumers are asked to provide a variety of files to document their creditworthiness. The files will include important information that contributes to the approval or denial of the loan.
By the time the loan goes to underwriting, the consumer has already provided lenders and the loan processing agents a wide breadth of information in a variety of file formats. This is where a feature like FormSuite could enhance your product and help your customers. Using optical character recognition (OCR) and intelligent character recognition (ICR), FormSuite helps your clients scan a variety of different file formats for unique information. Learn more about this process in our Build Data Extraction Into Your Financial Application blog.
From bank account statements and credit reports to job history and residence history, lenders are collecting information from the consumer in a variety of different ways at different points in the process. That's a lot of different information to organize for just one loan. It can get complicated quickly.
Underwriters must review all the documentation to see if the loan can be approved. They determine if funding needs can be met and run a second credit report to ensure the consumer hasn't made any other large purchases during the origination process. Then the underwriter passes the loan to the closing department.
The loan package is then reviewed. They confirm the fees and send the final documentation to the settlement agent for preparation and execution of closing documents. Finally, the lender's quality control department will review the loan for errors and send it to a central clearing house before being transferred to the consumer.
Why so many steps? Well, if there is a mistake, it can cost lenders a lot of money. The failure to compile consumer data and submit to regulators on time can result in massive fines. These penalties are put in place by regulators to keep lenders from making mistakes that could cost the consumer.
Due to loan origination costs, lenders can't afford to be in violation of loan regulations. Detecting regulatory exceptions prior to origination can save a lender time and money. With an HTML5 document viewer like Accusoft's PrizmDoc, your clients can view specific pages of each document and collaborate between departments with tools like annotation and redaction. Simply build out a way for lenders to route specific pages of the document to different departments and then they can view and collaborate on the document through PrizmDoc. This will enable a full-circle approval process for lenders to easily review applicant information between departments.
Integrating a Versatile Document Viewer Into Your Application
PrizmDoc facilitates collaboration on loan origination documents, allowing lending officials to highlight specific areas of a document or make comments through annotation without updating any original versions of files. This helps identify any red flags or unique circumstances which could affect an applicant's loan status.
As the consumer's files go through the loan origination process, they will be viewed by a variety of different departments. Using PrizmDoc's annotation tools, comments and red flags can be addressed quickly by each department, enabling them to avoid any potential errors.
In addition, PrizmDoc has features that can help with security audits as well. The HTML5 viewer enhances an organization's information security by enabling authorized users to grant or revoke access to confidential files. For example, printing or downloading files can be disabled based on an individual's security authorization. This ensures that confidential data stays internal to the company, complying with strategic guidelines and legal requirements. This can be especially useful if lending institutions are working with outside loan officers. If there is confidential information that they are not authorized to see, PrizmDoc can restrict the information based on authorized use.
One of the most desirable functionalities of PrizmDoc is its ability to handle file conversions. Do your clients need to convert multiple file formats into a single multi-page document? It's no surprise that consolidating each customer's data is very helpful when reviewing loan application information. PrizmDoc can help. Plus, this unique program is available on a variety of different devices. Help your lenders move through the loan origination process with ease and peace of mind, knowing their consumers' loan documents can be viewed safely and securely on mobile devices.
How SDKs and APIs Can Help Your Application Grow With Your Customers
In summary, Accusoft has a variety of SDKs and APIs that can help your application flourish. Don't waste time coding solutions that are already available at an affordable price. In fact, you'll enhance your product and help your customers alleviate pain points at the same time.
With ScanFix Xpress, your program can allow lenders to scan in a variety of different files and documents. FormSuite enables you to use OCR and ICR to identify form fields, capture data, and extract information. In addition, PrizmDoc grants your lenders the ability to view all consumer documents in one place without having to open other programs like Microsoft Excel. Help your clients make loan origination and credit approvals easier with Accusoft's SDKs and APIs.
Are you ready to enhance your current application? We would love to hear from you, contact us.