What is Mortgage Automation?

How many times have you heard the word AI this week? It’s all everyone is talking about. And the real estate sector is no exception to this latest trend. In real estate, this revolution is led by mortgage lending where processes are the easiest to automate.

In today’s swiftly evolving digital environment, mortgage automation is an essential asset for maintaining competitiveness and ensuring borrowers receive a smooth lending journey. If you don’t understand it, you can’t do it. It is important to understand the fundamentals of mortgage automation to reap its benefits. In this article, we discuss what mortgage automation is, how it automates the lending process, and its advantages.

Defining Mortgage Automation

Mortgage automation involves the integration of technology and software solutions to optimize the mortgage lending process. By using the latest AI systems capable of demonstrating human-like senses, document collection, verification, estimate calculation and plan suggestions are being done using minimal human interaction. The availability of information in centralized systems also makes it easier for machines to do monotonous tasks.

Stacy Dubovik headshotStacy Dubovik headshot
Stacy Dubovik of ScienceSoft

According to Fannie Mae’s quarterly Mortgage Lender Sentiment Survey® in 2021, the top three reported sub-processes include loan servicing, document verification, and underwriting. Since these processes include repetitive tasks, they are the easiest to automate.

Stages of a Mortgage Process and the Role of Automation

The mortgage approval process is a complex process comprising several steps from application submission to loan closing. Mortgage brokers have to go through a web of paperwork and communication to process every single application. However, mortgage automation introduces efficiency and simplicity into the process.

Let’s see how automation fits into every step of the mortgage process:

1. Pre-Qualification and Application:

The mortgage process typically begins with pre-qualification, where potential borrowers assess their eligibility for a loan. Typically, this would comprise long meetings to discuss every aspect of their financial situation and mortgage plans.

Automation comes into play here through online pre-qualification forms and calculators. These tools gather essential financial information, credit scores, and loan preferences, providing borrowers with quick insights into their borrowing capacity.

2. Document Collection and Verification:

By offering borrowers a secure portal to upload their documents digitally, automation can speed up this step. Information can be extracted from documents using advanced text recognition eliminating the need for manual data entry. This information can then be verified against dependable sources increasing accuracy and lowering the possibility of receiving false information.

3. Underwriting and Approval:

Mortgage underwriting is the most talked-about process when discussing automation. The analysis of credit reports, income verification, and property appraisals can be facilitated by automation tools. AI algorithms can make preliminary approval decisions and assess risk factors based on pre-defined criteria. This expedites the underwriting procedure while maintaining fair and impartial assessments.

4. Loan Closing:

Automation makes the preparation of closing documents easier by accurately populating forms with borrower and property information. Borrowers can electronically sign documents using e-signature solutions, eliminating the need for their physical presence and speeding up the closing process. Before the loan is approved, automated compliance checks make sure that all legal requirements have been met.

5. Updates and Communication:

Automation continues to play a role in mortgage servicing even after loan origination. Automated communication systems can send borrowers notifications about changes to their loans, reminders for payments, and details about escrow. By promptly responding to queries, chatbots and AI-driven customer support improve the borrowers’ experience.

Benefits of Mortgage Automation

Mortgage automation brings numerous advantages to both lenders and borrowers making it easier for both parties to collaborate. Here are some key advantages of mortgage automation:

Efficiency and Speed:

The entire mortgage process, from application submission to approval, is significantly accelerated by mortgage automation. Automated workflows decrease the amount of manual data entry, get rid of paperwork, and reduce human error, which speeds up decision-making and loan processing times. Borrowers’ overall experience is improved as a result of faster approval and fund access.

Reduced Human Errors:

Automation lessens the need for manual data entry, reducing the likelihood of mistakes and discrepancies. Furthermore, automated systems can ensure that mortgage processes comply with rigid regulatory and compliance requirements. Automation helps lower the risk of non-compliance, penalties, and legal issues by consistently applying predetermined rules and regulations.

Improved Customer Experience:

Research suggests that 92% of mortgage firms are putting customers at the center of their lending process post-COVID. Automation is the best bet to ensure customer satisfaction. Automated notifications and updates at different stages of the mortgage process improve communication and transparency for borrowers. Real-time status updates can keep homeowners informed and help them feel less anxious.

Cost Savings:

Automation eliminates the need for a lot of manual labor, paperwork, and physical infrastructure. The decrease in manual labor also results in lower operational expenses, enabling lenders to better allocate resources and possibly provide more affordable mortgage rates.


Automation is the next logical step for the mortgage industry. More than 60% of processes involving fact-checking and data processing have the potential to be automated. In this scenario, many mortgage companies are moving to the automation side making customers happy and finances better. Automate now and stay relevant in a competitive market!

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