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O2I's Workflow-based Loan Processing Helped Residential Mortgage Lender Cut Delays and Improve Business ROI

Case Study on Workflow-based Loan Processing Provided to a Residential Mortgage Lender

The Client

The client is a mid-sized residential mortgage lender based in Texas. The client has 100 employees and 4 branch offices. The company is a leading loan origination and servicing company and has the stated goal of making the entire cumbersome process of mortgage financing easy and enjoyable for its clients.

Client's Requirement

Due to the rising demand for mortgage loans, the client was looking to scale up funding from 500 to 1500 loans every month. However, its plans were not being able to be fulfilled due to lack of technology and resources. Therefore, the client was looking for a reliable third-party service provider that could handle rising mortgage loan volumes within tight deadlines. After careful search and scrutiny of many vendors, the client approached us with their requirement for complete back-office support.

Client's Challenges

This project needed an efficient process to be set up to shorten the loan processing time. To set up this process, we had to overcome the following challenges -

  • Gather all the relevant documents and make sure they fully complied with the loan program requirements.
  • Classify and key in data from the documents received in a timely fashion.
  • Collect the relevant verification and additional information according to strict deadlines.
  • Deal with inaccurate or incomplete paperwork with no title or deed information.
  • Deal with many priorities promptly and also provide quality customer service.

These challenges are common to the loan processing process and we knew we had to carefully prioritize and structure the important processing tasks via an optimized tracking and pipeline management system.

O2I's Solution

We introduced a mandatory documents checklist to remove any flaws from the document review stage. We needed to carefully calibrate the document review process with pre-determined parameters to reduce the size of the review and guarantee shorter turnaround times. We then created a well-defined three-step review process.

In the first step, we created a comprehensive checklist for gathering all the relevant documents, including those mandated by Fannie Mae and Freddie Mac investors. Only after the documents were received according to the checklist were they sent on to the review stage.

The checklist for the gathering documents in the first step consisted of

  • Credit History & Other Supporting Documents (e.g., bankruptcy, evidence of account payoffs, etc.)
  • Loan Estimate (LE)
  • Credit Documents (Mtg Statement, Note, Photo ID, SS Card, Divorce Decree, etc)
  • Uniform Residential Loan Application (Form #1003)
  • HUD-1/ TRID Closing Disclosure/Settlement Statement
  • Letter of Explanation (LOX)
  • Affordable Housing Program Documentation
  • Property Valuation Documentation with Supporting Addendum
  • Sales Contract - Buy-Down and/or Seller Contribution Documentation
  • Education Certificate (FHA)
  • Condominium Project Eligibility documentation
  • (FEMA Form 81-93) or Equivalent Form
  • FEMA Standard Flood Hazard Determination
  • Preliminary Title Insurance Binder or Commitment
  • Flood Certificate
  • Underwriting Transmittal Summary (Form #1008)
  • State and Lender Specific Disclosures
  • Account Statements Pay stubs, IRS Transcript, 4506, W2(s)/1099(s), etc.

In the second stage, we visually compared the relevant credit reports with the mortgage application to ensure that all the information matched. The documents were primarily verified for -

  • Completeness and accuracy of the documents
  • Whether the required legal documents existed
  • Evaluating whether company policies were being met

During the second stage, we also performed a side-by-side substantive review to monitor the overall quality of the review.

We performed the final stage of the document review after the underwriting, pre-closing, and post-closing steps. In each of these steps, the documents were reviewed to ensure that government and government-sponsored representations and requirements were met. We also had a quality control process that included creating and maintaining complete records of each mortgage application that was selected for quality review.

Our Process

We set up a process wherein each person in the loan processing process could complete their roles and responsibilities predictably and accurately. For this, we created an efficient process to ensure that each person in the loan processing assembly line received the right information at the right time in order to enable them to perform their responsibilities. Key steps in our process included -


Step 1

  • Receiving and Reviewing Documents for Compliance
  • Indexing the Loan Documents
  • Ordering and Analyzing Credit Reports

Step 2

  • Keying in the Uniform Residential Application (Form 1003) in the Loan Boarding System
  • Monitoring and Tracking Order Appraisal, VOE, VOR, Flood Cert, VOD, VOM
  • Monitoring and Tracking Order VA and FHA Case Numbers for Government Loans

Step 3

  • Ordering Titles and payoffs
  • Ordering Insurance and Surveys
  • Generating TIL Disclosures and GFE Estimates

Step 4

  • Collecting Signed Disclosures
  • Verifying that Disclosures are Complete and Accurate
  • Collecting Borrower Documents

The Result

Our setting up of a rule-based system and supporting it with an effective quality management system ensured that the loan processing workflow was streamlined and did not suffer any time delays or time lags. With this, our client was able to accommodate much larger requests for loans. The client's relationship managers and loan officers could also use their time thus freed to pursue more high-quality leads and close larger deals.

With our solid support and backing, our client grew its assets from less than $1 billion to almost $10 billion within one year. The client was also able to recover its investment in 3 months.

Some highlights of our service to this client are -


Frequent and brisk follow-ups to gather documents


Quicker movement of loans from the processing stage to the underwriting stage


Flexibility in adopting up-to-date technologies


Analytical processing to get the correct documents to the underwriter on time to allow him to close the deal quicker


Re-designing the loan processing workflow as per the client's requirement


Real-time responses to all the parties involved by working in different time zones as per the client's requirement

Outsource Title Search Services to Outsource2india

Outsource2india is a top provider of a diverse range of mortgage services to a global clientele. We have 25 years of experience in providing comprehensive mortgage support services, including Title Support, Pre-Processing Support, Processing Support, Mortgage Closing Support, and Mortgage Post-Closing Support services, among others. We specialize in providing end-to-end support and services related to loan servicing solutions for both the residential and commercial mortgage markets.

If you are looking for a reliable and cost-effective provider of mortgage services, get in touch with us today.

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