Mortgages and home financing are often thought of as tedious, slow-moving, and traditional industries where there is little room for innovation or creative thinking. However, Mr. Cooper, one of the largest home loan lenders in the US, had the opportunity to work with some of the world's leading companies in developing advanced AI and analytics to help improve customer experiences, lower costs, and provide better, more customized solutions and recommendations to the company's wide and growing mortgage customer base. Read on below to learn how.
Mr. Cooper, Google Cloud, and AI-Powered Mortgages
According to some estimates, companies can spend as much as $20 to file and store a single document. Hardly one in five companies consider themselves to be paperless, and some reports have found that document-related issues lead to over 21% in productivity losses in the United States as US companies spend over $8 billion every year managing their paperwork.
In April, Mr. Cooper Group partnered with Google Cloud to automate Mr. Cooper's loan documentation process to address some of these issues. The new digital mortgage servicing platform will lead to a more personalized customer experience that will use AI and machine learning to make it easier for customers to create, sign, submit, and review home loan and mortgage documentation.
The technology behind it has been made generally available to everyone, and the AI algorithm behind it (called Lending DocAI) processes the documents of loan applicants with specialized AI models. The service also uses human data reviews powered by an existing platform called DocAI and its Human-in-the-Loop AI capability. This technology allows human reviewers to verify data captured by an AI algorithm. An accuracy score is shared with the user and since the document is customizable and can be shared with others such as external vendors or partner organizations, reviews and task completion by others prior to approval and/or further processing can be streamlined across multiple users and parties.
Mr. Cooper's Investments in Technology to Improve Mortgage Services
While the Covid-19 pandemic has thrown many industries into a tailspin, it presented the mortgage and home financing space with a unique opportunity to grow. Getting it right and meeting unprecedented mortgage demand, however, has required mortgage and home financing companies to drastically rethink processes, lower costs, and improve times to market. According to Mr. Cooper CEO Jay Bray, Google Cloud's services and infrastructure will help Mr. Cooper do exactly that by drastically accelerating its development plans.
Over the last 10 years or so, Mr. Cooper made substantial investments in its IT infrastructure to improve user experiences and enhance efficiencies all along the operational supply chain.
Mr. Cooper has also developed over 300 proprietary mortgage-specific machine learning models. These models can classify mortgage documents with over 95% accuracy for critical documents and can be quickly "taught" to read new document types as well. With a peak throughput of 4,000 pages/min and an average throughput of 2,000 pages/min, Mr. Cooper's AI models have been shown to increase document processing efficiency by 400%, leading to a significant drop in costs. This will give the user faster access to the information needed to onboard and manage new mortgage portfolios - a critical capability where time and resources are limited.
The Google Cloud team echoed Mr. Cooper's sentiments, saying that the mortgage industry is a great example of how new technologies and innovations such as AI can be creatively used to unlock a great deal of business value while improving customer experiences. Overly manual practices that have long been standard in the mortgage process can finally be sidestepped, improving bottom lines and operational efficiency.
Value for Customers
The value proposition of these developments for Mr. Cooper and other mortgage and home financing companies is clear to see, but what about customers and clients?
With better, faster, and more accurate processing of documents, customers can more easily navigate, understand, and manage their loan- and mortgage-related documentation. Lower processing times mean lower work-hour costs, which are savings that mortgage originators can pass on to their customers. Better user interfaces also mean that it will be easier to compare options, look up competitor offerings, and lock in the best loan terms possible.
While certain factors such as available inventory and interest rates take time to change (or required state or federal action to change), innovation-driven organizations such as Mr. Cooper can leverage new technologies to disrupt the status quo and create new value streams for their customers and the organization as well. Mr. Cooper's investments in technology are a prime example of this forward-thinking approach and they will ultimately help Mr. Cooper be a better, faster, and more customer-friendly mortgage and home loan originator for its customers.
The Bottom Line
Banks, brokers, and mortgage/loan originators can process hundreds of documents for every loan they handle. It all tends to be a very manual process that can add thousands of dollars in administrative and processing overheads for every loan. Automated processes and advanced AI and analytical capabilities such as those created by Mr. Cooper to improve mortgage services can reduce the time, stress, and cost of issuing, processing, and managing mortgages.
To learn more about Mr. Cooper or for a free assessment of your mortgage to identify potential cost savings opportunities, visit https://www.mrcooper.com/mortgage_checkup.