How important is data and document management for loan origination?

The entire process of loan origination is indeed very tedious. From organizing and managing loan requirements to ultimately processing the mortgages, the burden on the lenders increases all the more if the process involves manual handling of paper documents. However, with the advent of technology in the mortgage business, much of this trouble can be alleviated with mortgage document management solutions. Such solutions improve the efficiency in loan servicing, check the rising costs, condense cycles of loan originations, and increase security of the collected data.

The landscape of loan origination has been evolving, in terms of management of data and documents since the foreclosure documentation catastrophe of 2008-2010. New regulatory bodies like the Consumer Financial Protection Bureau and the Federal Housing Finance Agency were established after the bursting of the housing bubble. At the backdrop of all this, and the low volumes of loan origination and profits, these organizations have been, ever since, framing and implementing regulations encompassing loan servicing and document transactions.

With falling profit margins and increased regulatory pressures, it really is a challenge to maintain all the documentation proper on paper. Documenting transactions has become as important as conducting transactions. And the result? Getting tired of paper. In the era of housing boom, the need for proper documentation was either not realized ,or overlooked. However, it was not emphasized enough. Not anymore.


These days documenting every transaction is important. Equally important is improving the efficiency of document management and security of documents.

Following are the benefits of including data and document management solutions in the loan origination process –

  • Flexible Storage and Retrieval

Documentation management solutions let lenders save/convert the documents in any preferred digital format. Stored safely in a central repository, the digital files can be accessed and retrieved from any part of the world. Receipt, verification and approval of documents are automated on the basis of rules set by the regulatory bodies. Certain document management solutions provide lending institutions with a discreet and convenient response to market fluctuations, which can go up and down effortlessly with no huge capital investment.

  • Efficiency in Operations

Digitizing documents and storing them in a protected central storage area lets lending institutions take advantage of the digital era. But more importantly it enhances the efficiency of operations in the loan origination process. Even if you create multiple copies of the documents, there is always a risk of inconsistent management or loss of files. Instant access to the documents and information of the customer base helps employees to be proactive and spend their time in executing vital responsibilities, instead of searching for the papers. Thus there is acceleration in the origination process, reduction in wastage of time, and eventual augmentation of customer satisfaction.

  • Improvement in Compliance

The mortgage industry is characterized by changing regulations, and continuous monitoring and scrutiny. Lending institutions are required to respond to the regulators with clean, properly organized documents and files, only to prove the fact that they have strictly adhered to all the regulations. Lack of complete documentation or files submitted in a disorganized manner could invite imposition of penalties. Therefore, the easiest and most affordable way to allay such risks is by storing the document in electronic format. The auditing process can then become a stress-free affair.

E-Signatures and Online Document Management

Modern day mortgage software solutions and loan origination software provide excellent features to ease document management and compliance to regulations. Any number of signors can sign in electronically to a document. The forms support text, checkboxes and radio buttons, and the fields are cryptographically protected. Form field verification helps ensure completion of forms. Essential information like date, time and IP address of the computer will be captured and embedded automatically. All this gives a great level of reliability and security along with multiplied ease of transaction than on paper.


Preethi vagadia is a business architect worked in Mortgage and Finance software department with top notch companies and has over 8 years of experience in Mortgage Lending Technology and mortgage software management etc.

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