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IDP for Mortgage- Disrupting Legacy Origination

by Amit Jnagal, on March 24, 2022 11:30:00 AM PDT

With rising home sales in the US and increasing demand for the use of technology in the mortgage approval process, IDP-driven end-to-end automation is expected to make a significant impact in this space. Because processes in mortgage origination are labor-oriented, automation and IDP are more impactful and beneficial for the mortgage industry than for most other Industries.

According to the McKinsey & Company report, A Future that Works: Automation, Employment and Productivity, “the value of the potential benefits of automation, calculated as a percentage of operating costs, is more than 90 percent for mortgage origination.” Moreover, this report says it takes an average of 37 days to approve a mortgage application in the U.S., of which about 14 to 21 are spent on the mechanics of application processing. With IDP, this could potentially drop to under six days.

Mortgage automation is the key to a great customer experience

The last few quarters have seen one of the largest mortgage refinancing waves in recent history due to historically low mortgage rates. Along with thousands of others, I went through a mortgage refinancing personally. I refinanced my mortgage with the same bank that had the original mortgage. As a part of the process, I had to submit more recent documents related to my income and other credit-related documents. It took me a staggering 80+ days to get the refinancing done!

Most of the time was spent going back and forth between the documents I had submitted and the clarifications that the underwriters needed. We exchanged a ton of emails with messages like “Can you explain this deposit amount?” or “These statements are too old, can you send us a statement for this month?”

Mortgage origination is the space where IDP can make a huge difference by cutting down this back and forth between the loan officer and the applicant. Additionally, with its Straight Through Processing (STP) capability, IDP systems can cut down the loan processing cycle by more than half. A recent study that Infrrd conducted along with Apps Run The World shows that 66% of the mortgage companies that employed IDP saw the elimination of manual steps in mortgage processing.

How can IDP transform the mortgage industry?

Better Scaling - Hiring, training, and retaining employees takes a lot of work. When your business volumes pick up, it generally takes a lot of time to increase the size of your team, train the new staff, and wait for them to become efficient. Scaling an IDP platform simply requires more infrastructure, which is relatively inexpensive and rapidly available. IDP investments can help you scale your operations without having to proportionally increase your team size.

Processing Steps Elimination - When work is being done manually, there are often unneeded processes. Automation can help to remove some of these completely. For example, consider the document scanning process. When multiple documents are scanned in a single PDF file for the data processing team, a blank page needs to be inserted where one document ends and another one starts. This time-consuming process can be completely eliminated thanks to IDP platforms.


Better Organization - When data processing teams work with documents, it takes a lot of effort to organize their work to make them more efficient. IDP systems can help organize this work automatically. For instance, if your data processing team processes mortgage documents like W2 forms, bank statements, and paystubs, you can route them intelligently to make sure that each data processing executive sees all the W2 forms first and then switches to bank statements. There is a 10-20% efficiency gain to be had from organizing work items in this way.

How Infrrd Stacks Up?

Infrrd for Mortgage is a mortgage-specific IDP solution. This solution offered by Infrrd for Mortgage Processing is based on Infrrd’s proprietary machine learning algorithms and patented AI technologies for processing your documents or data with high speed and accuracy. Infrrd for Mortgage has the ability to decipher diverse types of documents and identify many variations of fields and images within them.

Infrrd’s IDP has built-in, pre-trained mortgage models trained with numerous variations to handle specific mortgage-related documents.

Infrrd’s pre-trained Mortgage models, which are based on advanced machine learning algorithms, are already trained and exposed to a large volume of variations so that you may be able to get started with your IDP and automation journey faster than the current market or industry expectations.

What Next?

It is a necessity to make sure you are prepared for whatever challenges this rapidly-transforming world throws at you. As we discussed, if Mortgage Processing time is 30 or more days today without IDP and 20 to 30 days with IDP, with the potential to be 10 to 15 days in the next five years, it’s important for you to initiate the mortgage process automation journey now. A modern IDP solution is currently the game-changer in this space.

Investing in automation or technology is no longer a choice or luxury for any industry. You have the potential to exponentially increase your Mortgage process efficiency within a few weeks of implementing an effective, competent IDP solution. An automated, integrated, simplified, and collaborative lending platform that accelerates the loan processing journey for your customers enables you to maintain, or gain, a strategic edge in your competitive space.

Topics:Intelligent AutomationAI ReadinessBusiness InsightsIntelligent Document ProcessingMortgage Document Processing

About this blog

AI can be a game-changer, but only if you know how to play the game. This blog is a practical guide to turning AI into real business value. Learn how to:

  • Make sense of complex documents and images.
  • Extract the data you need to drive intelligent process automation.
  • Apply AI to gain insights and knowledge from your business documents.

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