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Touchless Documents-How Automatic Document Classification Makes Lenders More Efficient

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Lack of digital documentation

Mortgage loan applications in the United States typically consist of 500 or more pages of various documentation. Before applications can be evaluated, all of these documents must be categorized and the data on each form extracted.

Most loan processing documentation is paper-based, from sales to origination and servicing. Aside from the obvious issue of high operational costs – including print prices, storage, and delivery – paper-based documentation can present significant challenges for lenders.

Compliance with regulatory standards becomes increasingly difficult due to time-consuming procedures like integrating information from paper documents and reporting to regulators.


And this is more complex than it sounds!  

Extracting data and classifying mortgage loan application packages has been costly and labor-intensive for lenders.

A mortgage is often one of the essential purchases in a borrower’s life. Therefore, they don’t anticipate closing their loan in minutes or hours, as they do when applying for personal credit. However, they demand prompt service and are disappointed when paperwork delays last for weeks. A growing number of homebuyers are from a generation of digital natives who want transactions to go smoothly. To compete in the fickle millennial market, lenders must compete on experience, quality of service, and speed.

Automating data capture can fast-track the home loan process from weeks to days and increase operational efficiency in the loan process.

Modernize and automate processes 

How can Touchless Documents change the mortgage cycle?

The importance of touchless documents in the mortgage sector is straightforward: it automates document processing. Think of the significant amount of time spent on tasks such as identifying the type of document, organizing them into proper files, examining income documents, and manually inputting data. Touchless Documents automates indexing, extraction, and filing, saving lenders the time and effort of manually processing most documents. Instead, lenders only need to check documents marked as faulty by the AI system.

This will benefit mortgage lenders in multiple ways:

Increase operational efficiency in the loan process: Automate the historically time-consuming lending process, making it more streamlined and seamless for all stakeholders.

Faster time to close: Most lenders who use next-gen digital technology with AI can expect a 30% decrease in document processing times. This automation alone reduces the average origination cycle by several days.

Improved staff utilization: Most lenders struggle to keep their senior processors and underwriters focused on the most crucial credit decisioning activities. Paper procedures continue to take up an undue amount of time in their daily operations. Loans usually include at least 20 different types of documents totaling hundreds of pages. Specialists have more time to focus on their core, high-value work when AI extracts routine data from papers.

Less human errors: New AI models for document processing are exceedingly accurate, with error rates for structured documents often falling below 5%. This eliminates the possibility of costly human data extraction errors, which slow down the underwriting process. Human mistake rates rise during particularly busy periods as staff strains to keep up.

Regardless of volume, a machine-driven process produces consistent outcomes. The most recent AI engines have feedback loops that minimize mistake rates as the model refines itself.

Touchless Documents: Work Smarter & Faster

While lenders have had to undergo lengthy processes in the past manually, Tavant has introduced a machine-oriented approach that successfully increases workflow by up to 80% by automating and regulating the processes of loan application and disbursal.

Tavant’s Touchless Documents instantly recognize documents, automating document classification, indexing, splitting, categorization/subcategorization, pairing with borrowers, and data extraction with the highest accuracy.

Additionally, the Touchless Lending platform integrates seamlessly with existing lender systems, including CRMs, Point-of-Sales, LOS, and document management systems, to optimize document-related workflows, organize and process documents faster, and deposit the results of the document classification and data extraction back into the system of record.

Processing broker-submitted loan paperwork was time-consuming and labor-intensive prior to the implementation of Touchless Documents, necessitating the use of a pool of human resources and turnaround times that could be overnight.

What used to take hours is now done in minutes after integrating Tavant’s Touchless Documents. Brokers can receive quick feedback on their file uploads and provide direct advice to their borrowers on document upload requests. Touchless Docs has helped businesses process nearly 500 loans and over 90,000 pages of loan documentation in just one month, with a document classification success rate of about 92%.

Tavant has been the top Fintech software and solutions provider for over 20 years, anticipating customer demands and adjusting accordingly to provide the correct customizable solutions. Tavant’s Touchless Lending® product suite maximizes data-driven decision-making to address even the most complex lender and borrower issues.

How you begin is how you win!

As the leading Fintech software and solutions provider for more than 20 years, Tavant proactively anticipates customer needs and adjusts accordingly to provide the right configurable solutions. Tavant’s Touchless Lending® product suite maximizes data-driven decision-making to solve even the most complex lender and borrower challenges.

Reimagine Your Mortgage Experience Using Touchless Lending®

Request a demo or visit here to learn more.

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