As someone who spent the better part of the decade working with lending companies on improving loan processing through Document-Driven Workflow, I've always thought that it doesn't make much sense to scan alone file after it's closed. Recently, however, I've realized that I was wrong. While the benefit of scanning loan files post-close may not be as strong as driving the process using workflow, there's a lot to be gained by scanning loan documents after the loan has been closed. Let's take a look at three main reasons why:
Loan Sale - Although the market in 2010 is not quite as hot as it once was, the loan sale industry is still alive and well. For Originators, increased competition and a wider pool of available options for buyers has forced competitive differentiation in any way possible. The ability to provide closed loan files in a convenient image format is one way to do this. Scanning mortgage loans post close and creating a series of PDFs or TIF images allows for faster transfer to the secondary market, meaning faster access to payment.
Servicing - Loan Servicing is one piece of the business that never seems to change. In spite of all the advances in online technology, there are still a number of questions that require reference back to the original loan files. Being able to access these files directly through the origination system in an image format, while customers are on the phone, improves client satisfaction and reduces costs for the servicer.
Foreclosures - The dreaded "F" word has led many lenders to go back and image archived loans. When a Lender is able to quickly provide all the required paperwork relating to a loan, they stand a better chance of success during foreclosure proceedings. In fact one of the most common causes for judgments against mortgage companies is the inability to produce an original note. Even if the note is available, many lenders have found that the onerous task of rifling through countless papers to find that precious document has been a costly process.
I continue to be a proponent of using document management and workflow for mortgage lending, as the efficiency gains by capturing documents accurately during the loan origination process provide significant savings and increased compliance. However, for those organizations that either have cultural or process-related obstacles to implementing workflow, the concept of scanning loan documentation post-close still holds great appeal. In a more competitive marketplace, the improved customer service and reduced wait times that scanned files can provide leads to happier borrowers, and as market conditions improve, hopefully more repeat business.