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From Legacy to Modernization: Connecting the Digital Dots in Underwriting

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The rapid advancement of technology over the last few decades has transformed the consumer lending market, although the extent to which this transformation has occurred is widely debated. Fintech lenders have reduced the time required to process mortgage applications. Lenders have gradually moved from a traditional to a more digital lending environment.


Three key drivers have led lenders to make this move:

1) The need for efficiency: Digital lending platforms can process loans in a fraction of the time it takes for loan officers to do so. This means that customers get their loans faster and at a much lower cost.

2) The need for innovation: Lenders are always looking for ways to enhance the customer experience and improve adoption rates. Digital lending offers them an opportunity to do so by providing tools such as instant approvals, online account management, and remote check deposit.

3) Evolving customer expectations: Customers want more than just a simple loan transaction. ‘Speed to decision’ is vital to customers.

Driven by the need for efficiency, innovation, and evolving customer expectations, most lenders have been moving steadily toward greater digitization. Underwriting has been a key focus area. Most lenders have actively been upgrading their underwriting capabilities with more advanced digital technology and expanded data sources. Data mining and analytics are rapidly changing the lending landscape by enabling businesses to capture and process real-time data to their advantage.

According to Insider Intelligence’s Online Mortgage Lending Report, automated underwriting processes is crucial for the success of modern lenders as it can significantly reduce loan processing times and interest rates.

The Impact of Automated Mortgage Underwriting Across Various Lending Stages 

Manual underwriting entails interacting with disparate data sources, which results in extreme inefficiency in risk assessment. There is no central repository for data that can be gathered, segmented, stored, and accessed quickly. This results in underwriters missing critical information that could significantly affect a borrower’s risk profile.

Using Artificial Intelligence, Machine Learning Algorithms, and other related technologies, automated underwriting software enables lenders to make underwriting decisions more quickly, with increased accuracy, and with minimal human intervention. It is accurate, faster, and more reliable than manual underwriting. In order to make an analysis report, the automated underwriting system automates the entire loan approval process, from extracting data from various underwriting documents to matching it with third-party data from other financial institutions, like banks, creditors, lenders, and so on.

FinDecision- A mortgage industry “one of a kind” product that exceeds customer expectations

Tavant’s FinDecision is an AUS automation and underwriting platform that enables lenders and loan originators to achieve operational efficiency through optimized intelligent business processes and workflow orchestration.

It is a core component of its straight-through processing and automated underwriting. It enables lenders to optimize loan fungibility and execution while maintaining operational efficiency.

FinDecision leverages machine learning and process automation to submit loan data to automated underwriting systems with a single click, enabling lenders to see the full scope of operational benefits available to their borrowers and thereby improving the overall borrower experience. Through automation, lenders can reduce downtime and costs while improving loan quality.

FinDecision compares investor guidelines, multi-AUS response, and loan data. It also provides a list of the most common questions and answers for first-time home buyers.

The platform automates the underwriting process, powered by AI and machine learning algorithms. The platform eliminates human errors, keeps data up-to-date, and provides real-time insights to lenders. This revolutionary software provides a single view, side-by-side comparison of investor guideline responses and offers 360-degree insights on the various segments of loan data (Income, Asset, Collateral, Credit, Borrower).

FinDecision automated data quality check (lender, investor, and origination channel-specific) enables the loan processor to prep the loan file instantly and review data inconsistency and quality checks. It automatically updates the loan data according to the investor’s requirements (data mapping and representation).

FinDecision enhances loan quality and improves the overall borrower and lender experience. It offers an automated, one-click approach to achieving loan fungibility and pricing best execution on the one hand, and operational best execution on the other, during the loan’s processing, underwriting, and secondary market stages. It is a core product within Tavant’s Touchless Lending platform and is Loan Origination System (LOS)-agnostic.

Wrapping up

To remain competitive, lenders should speed up underwriting transformation. Automated underwriting evaluates risk and underwrites loans using a technology known as automated underwriting systems (AUS). It has the potential to accelerate and simplify the loan approval process for both lenders and borrowers—it is not an exaggeration to say that automated underwriting brings the mortgage process into the twenty-first century.

Tavant’s AUS automation and underwriting platform, FinDecision provides an intuitive way to eliminate hard-coded legacy IT systems. It compiles findings to credit conditions and compares them (existing vs. new).

What Next?

Schedule a demo with Tavant today, visit us here or reach out to us at [email protected].

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