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Automate the Analog so Underwriters Can Focus on What Matters

Automate the Analog so Underwriters Can Focus on What Matters

Technology-Driven Tools Ease Underwriting Burden, Boost Efficiency

The underwriting conundrum is a story that most lenders know too well. Weighed down by manual, stare-and-compare activities, today’s underwriters are neither able to maximize their skillset nor able to accomplish more than just a few loans a day. The result is underwriter burnout and substandard lending productivity. 

In a recent article, I examined the challenges the industry is facing with regard to underwriting automation – or lack thereof. Underwriting automation remains a timely and relevant concern for many mortgage lenders, and Black Knight is committed to innovating and investing in solutions that offer reprieve to burned out underwriters and process efficiencies to lenders.  

Rapid Change, Record Volumes and Market Uncertainty 

Underwriting pain points aren’t necessarily new, but the circumstances of our modern mortgage lending environment have amplified them. The industry is transforming at a rate we’ve not yet seen, and borrowers increasingly expect speedy processing and digital experiences. Meanwhile, historically low rates continue to drop and boost purchase and refinance volumes. Margins are narrowing and regulatory requirements are ever-changing. Plus, the COVID-19 pandemic and a new administration are adding a layer of uncertainty for the future, though low rates and refinance volumes are expected to continue this year. 

With these conditions in mind, lenders are wise to take a step back and consider their current practices and technologies. Unsurprisingly, gaining underwriting efficiencies continues to land at the top of many lenders’ wish lists. Before we dive into solutions, let’s examine the reality of those closest to the matter: underwriters.  

The Underwriter’s Burden 

Underwriters are up against a lot – and as a former underwriter myself, I can attest to their burden. Bogged down with tedious, analog tasks, they have little time left to put their specialized skills to use, spurring job dissatisfaction and lost productivity. 

Fundamentally, underwriters are the financial experts in the lending process. They take a deeper dive into the data than anyone else to determine borrower eligibility, completing complex analyses and minimizing risk. This is a critical responsibility, and understandably, the weight of it costs lenders a pretty penny. Underwriters are some of the highest-paid employees at lending firms, making underwriting the most expensive step in the process. 

So why are these highly qualified, essential employees so often spending their time digging through disorganized data, tracking down missing documents and signatures, and performing line-by-line comparisons of tax returns and bank statements? In a world where just about everything is automated, from our robot vacuums to public transportation, isn’t there a better way?  

For Black Knight, it’s a resounding “yes!”  

Introducing Underwriter Assist 

At Black Knight, we take pride in addressing industry challenges and changes by continuously innovating and investing in new and existing products. We believe that this frees up our clients to focus on their business goals without the concern of whether their technologies can keep pace.  

Black Knight has been addressing underwriting challenges for some time now, investing significantly in automation to maximize the way underwriters perform their jobs and improve their satisfaction along the way. The fruit of these investments – Underwriter Assist℠– uses capabilities like artificial intelligence, deterministic logic, decisioning and workflows to boost productivity, while helping to reduce risk.  

Before we dive deeper, I’d like to emphasize that Black Knight designed Underwriter Assist to do just that – assist. The solution is meant to complement and enhance the work of experienced underwriters, not replace them. Underwriter Assist specifically addresses the quality and productivity challenges lenders face today. This facilitates an environment where automation and digitization give underwriters a much-needed break from time-draining, manual steps in the process, freeing them up to focus on the most critical parts of their jobs: complex analyses and decisioning.  

Underwriter Assist bi-directionally integrates with AIVA, Black Knight’s artificial intelligence solution, to help underwriters knock out analog processes more quickly and efficiently. For example, AIVA can review documents within a borrower’s loan package and then extract the required data, recognizing W2 forms and pay stubs and pulling the income data points – all within a couple of minutes. AIVA also categorizes the data so year-to-date comparisons can be made and monthly estimated income verified against W2 forms.  

In addition, AIVA verifies that document requirements for each part of the decision are met. “She” understands the rules for documenting self-employment, for example, and can determine if additional information is needed based on evaluation of tax returns.  

Underwriter Assist runs AIVA’s extracted data through Black Knight’s sophisticated decisioning rules engine, where standard and lender-defined underwriting metrics are applied to determine the borrower’s ability to repay the mortgage; factors such as assets, credit and property appraisal are considered. Based on the analysis, Underwriter Assist produces a scenario that can be run against multiple lender products at several price points.  

With the help of Underwriter Assist, your underwriter now has a complete analysis and can move on to facilitating review and forming a well-supported underwriting decision – with many hours saved and eyestrain avoided.  

Prime Time for Automation 

Now is the time to evaluate the ways your firm can use automation and digital capabilities to gain efficiencies and deliver better borrower experiences. Those who don’t risk falling behind the competition in a rapidly changing environment. Automating the manual steps in the underwriting process can offer big savings by way of cost and time, not to mention risk mitigation and improved job satisfaction for underwriters.  

 Take the first step by learning more about Black Knight’s Underwriter Assist solution today.  

 About the Author  

Richard (“Rich”) Gagliano is President of Origination Technologies for Black Knight, Inc. (NYSE:BKI), a premier provider of integrated software, data and analytics to the mortgage industry. As the division’s leader, Rich is primarily responsible for the direction of Empower®, Black Knight’s loan origination system for retail, wholesale and consumer-direct channels; LendingSpace®, Black Knight’s loan origination system for correspondent lending; SalesEdge®, Black Knight’s lead management solution; and Quality Insight®, a quality control workflow solution that supports greater loan transparency and data integrity. 

 With more than 30 years of experience in the financial services industry, Rich offers a wide range of lending-product knowledge and insight. Before joining Black Knight, Rich was Senior Vice President of Direct Lending and Chief Administrative Officer at Aurora Bank, where he was responsible for management of the direct-to-consumer lending platform (sales\operations) and established Aurora Bank’s internet lending channel.