It always feels like there are never enough hours in a day. And in the mortgage industry, if you’re not meeting deadlines, you’re losing clients. While my team and I are very detail-oriented when it comes to loan processing, UWM, our lending partner, has just changed the game. They’ve just released I-Bolt—a new system that uses OCR technology to improve the speed and efficiency of initial loan approvals.
OCR stands for optical character recognition, and it’s a way of automatically extracting data from written text on things like printed forms—such as mortgage applications. This automated process now makes it possible for home buyers to get an initial loan approval in 15 minutes rather than a couple of days. In the middle of one of the hottest housing markets in US history, this is already making waves.
I’ve said it for years, and I’ll say it again, the mortgage industry has always needed to make drastic changes to how it processes loans for funding. My team and I work very hard to make sure that we give our clients a competitive advantage over other home buyers, and nothing says “sold” like an initial loan approval.
In the home buying process there are a couple of steps. They are: application, pre-approval, processing, underwriting, 2nd round of underwriting, and clear to close. While each explanation varies depending on who you speak to, these six steps are the bones of the mortgage process. Now, with I-Bolt, that process is cut down from six steps and streamlined into four.
So, why is this a game changer? Because loan processing and the initial round of underwriting are the two lengthiest parts of the home buying process—and they no longer exist. The reason you normally need a second round of underwriting (underwriting is just verifying the home buyer’s application information) is because lenders might have questions and request confirmation about information such as employment, previous owning history, and more.
With I-Bolt, getting fully funded for a mortgage is going to start happening at a much faster pace. Not only that, but I-Bolt is so efficient, that it can actually help your second round of underwriting be less intense in terms of the information the lender would like confirmed. That’s because OCR extracts client information so accurately that no one questions it.
Lots of people still believe that cash is king. They believe that there’s nothing more appealing than money that’s ready for the taking. But here’s the thing—cash offers aren’t flexible. What you see is what you get. And if a seller asks for more money, the cash buyer might not be able to match the seller’s new price.
Home buyers that have been initially approved, on the other hand, have already swum halfway across the pond. This means that they are much closer to actually having a fully funded loan on their hands. But what makes an initial loan approval more appealing to sellers and realtors when compared to a cash offer, is that buyers with initial loan approval have access to a broader range of funds. They’re provided with the maximum funding they’re eligible to receive, which gives them more room to meet a seller’s demands.
Naturally, the home buyer who looks like the best bet is the person who’s going to be helped first. So rather than scrimping and saving to put everything on the line, only to have the possibility of having your offer rejected, you could land a home with one well-timed initial loan approval, and finish up the process in a matter of days.
In the past, a home buying team has always been needed to check and double check client information. Now, that’s all being thrown out the window with I-Bolt, and the processors and underwriters of today are going to have to bring more to the table than a sharp set of eyes. Processing and underwriting positions have always been looked at as purely mechanical positions, part of the conveyor belt system of processing mortgages—but that’s far from true.
In fact, a good processor is important because of the relationships they build with underwriters and clients. Their job is to both speed along the mortgage process, but it’s also to connect with others, to show them exactly why Rate Leaf stands out as a home buying team. While my team and I have always put people first, this is a great direction to head in for the mortgage industry at large. It’s going to push brokers to see the people behind the papers, and I’ve always preferred for business to be centered around community, rather than profit.