In Pursuit of Paperless Servicing
Any lender will tell you the most paper-intensive department within their organization is servicing. This rang loud and clear at the recent National Mortgage News Servicing Conference.
Everyone there agreed that automation advancements on the origination side of the house have made a paper-intensive process somewhat easier. But at the end of the day, 200-plus-page paper loan files have to be delivered to servicing for maintenance and storage. It’s up to the servicing department to ensure the documents aren’t lost and are stored in the correct loan file.
Not an easy task.
At the conference, I spoke about how enterprise content management (ECM) – also called document management – alleviates these pains by converting mountains of paper and files into electronic images stored in an easily searchable and indexed format. This prevents documents from being misplaced and allows them you to share them internally, as well as with investors and other service providers.
Save Some Dough
With document management, you streamline operations by scanning all documents contained in – and associated with – a loan file into a central database. For many servicers, files are typically printed out and stored as a hard copy in an off-site storage facility. Document management systems create the ability to store files in a secure electronic database, allowing your employees to access them immediately. The paperless environment eliminates the need to print and store multiple copies of loan files, which adds up to significant cost savings.
Many servicing organizations who attended the conference have production offices located throughout the country, and the influx of documents and files to their servicing departments is staggering. In addition, servicing departments receive document and file requests from production staff for research and market information. Without ECM, someone visits the storage facility, physically retrieves the needed document, makes a copy and then ships or couriers the copy to the production office.
By storing files electronically, the production staff has access to all closed loan files through the document management database, eliminating much of an institution’s storage and shipping expenditures.
If they don’t image loan files, servicers run the risk of information and documents getting lost in the shuffle. To mitigate this risk, institutions can use document management to set up an indexing strategy and automatically attach keywords, or metadata, to all documents and files. Indexing enhances “findability” because it ensures everything is saved correctly using agreed-upon search terms, such as loan number or borrower last name.
Storing business-critical data on paper also leaves firms vulnerable to data theft, natural disasters or misplaced documents. This creates the need for multiple copies of loan files. Not only is this “back-up” system inefficient, it also makes theft much easier. If you have three to four copies of a loan file, will you notice if one goes missing?
As many attendees shared, the largest pain point for any successful servicing operation is how to manage the volume of documents and files the lending process creates. With document management, servicers of all sizes are able to capture, store and manage documents in a way that suits their individual business needs, ensures greater document security and increases efficiency. That’s a goal everyone at the conference agreed is worth pursuing.