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  • Digital mortgage transformation: a foundational change

    Ryan 617 585 0365Ernst & Young LLP

    Maurice 214 969 8404Ernst & Young LLP

    Nikhil LelePrincipalNew 212 773 1996Ernst & Young LLP

    Paul NagaiPrincipalNew 212 773 9337Ernst & Young LLP

    Houman TalebzadehPrincipalLos 213 977 3709Ernst & Young LLP

    Daniel ThainExecutive 704 338 0621Ernst & Young LLP

    Contacts EY | Assurance | Tax | Transactions | Advisory

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    Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.

    EY is a leader in serving the global financial services marketplaceNearly 51,000 EY financial services professionals around the world provide integrated assurance, tax, transaction and advisory services to our asset management, banking, capital markets and insurance clients. In the Americas, EY is the only public accounting organization with a separate business unit dedicated to the financial services marketplace. Created in 2000, the Americas Financial Services Organization today includes more than 11,000 professionals at member firms in over 50 locations throughout the US, the Caribbean and Latin America.

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    SCORE no. 05936-171US 1710-2436983 BDFSOED None

    As customer expectations have evolved and competition from nonbank market entrants has expanded, large mortgage banks require a rapid shift in both digital capabilities and strategic mindset.

    Digital capabilities are transforming the full mortgage life cycle

    Origination Workflow-enabled straight-through

    processing, reducing need for manual keying, intervention by processor

    Data verification of credit, income, identity and title insurance via third-party integration to origination system

    Point of sale (POS) Engaging tools and calculators,

    providing customers with indicative pricing and product availability upfront

    Simple online application that captures, validates and provides conditional decisions instantly

    Underwriting Automated sourcing from application;

    submitted documents with alerts for missing information

    Conditional approvals POS platform engine analytics succinctly highlighting red flags and resolution options

    Closing Expanded use of electronic signatures

    (e.g., DocuSign), eNotarization where available; promoting detailed borrower review prior to closing

    Hybrid process enabled for documents requiring wet signature at closing

    Secondary marketing Linkage with investor underwriting

    platforms to accelerate borrower decisioning and loan sales

    Enrollment in programs, such as Day 1 Certainty, to streamline required verification activities

    Servicing and default Multichannel account access, real-time

    status, and straight-through and self-service transaction processing

    Proactive outreach and service offerings based upon predictive analytics

  • Disciplined investing creates sustainable results

    As nonbanks were 6 of the top 10 largest lenders by volume last year, traditional banks can no longer delay investing in digital technology or should partner with FinTechs to enhance their offerings and slow erosion in market share.1

    Link to business strategy. Organizations must define their business strategy and target investments in digital-mortgage capabilities that directly align. In areas where a bank is currently unable to deliver on customer expectations, third-party providers can augment existing tools, processes and capabilities and promote an accelerated timeline to the target-state digital mortgage.

    Foundational capabilities. Creation of a flexible, application-programming interface-enabled technology foundation will enable the organization to quickly adapt to innovation in the marketplace and changing customer needs. Transforming to a software-as-a-service (SaaS) model enables internal technology teams to focus their efforts on innovation and continuous improvement vs. maintenance of complex legacy systems.

    Prioritized initiatives. Clear priorities to deliver innovative services and build a strong, flexible foundation are required to make sure that investments align with market, efficiency and control objectives. Executive commitment to a unified vision is critical to success in large transformational efforts.

    1 Banks No Longer Make the Bulk of U.S. Mortgages," The Wall Street Journal,, accessed 9 October 2017.

    EY brings the resources and methodology to guide your digital mortgage transformation

    We are assisting leading institutions to redesign their mortgage operations to meet the challenges of a new digital era where flexibility, innovation, customer centricity and compliance will be critical to market success.

    Growth-oriented transformation Sustainable operations Platform transformation



    Enhancing customer experience

    Business and operating strategy

    Customer and user journey

    Digital enablement

    FinTech evaluation and integration

    Merger and acquisition integration

    Customer relationship management

    Omnichannel transformation (mobile, online, branch, voice, mail)

    Profit optimization analysis

    Asset performance enhancement

    Predictive customer and portfolio analytics

    Simplified business model and sustainable operations

    Operating model assessment, design, transformation

    Expense and operating efficiency analysis

    Process assessment, re-engineering, implementation

    Automation and infrastructure (cloud hosting, robotics, machine learning, imaging, optical character recognition (OCR) and eSign)

    Change road map and business case development

    Regulatory compliance assessment

    Controls and reporting assessment and design

    Data and analytics design

    Transforming and augmenting core operational systems and infrastructure

    Core system conversion and upgrade (point of sale, origination, servicing, default management, secondary marketing)

    Digital platform enablement (design, architecture and development)

    Managed service utilization and enablement

    Transition to/from managed service and hybrid models

    Goals Acquire and retain customers

    Increase profitability

    Acquire assets

    Improve productivity

    Balance fixed and variable costs

    Promote quality and compliance

    Select providers

    Upgrade and replace applications

    Insource and outsource operations

    Foundational changes are required to support this transformation

    Implementing a holistic digital mortgage program will require a demonstrable shift from existing legacy strategies. Strong commitment to the journey will enable a superior customer experience, while reducing operational expenses.

    From To

    Advanced analytics

    Reactive, exception-based reporting and metrics, providing a retrospective view of custom behaviors and operational performance

    Proactive analysis of big data, providing insights into potential opportunities, predictive behaviors and projected operating performance

    Straight-through processing

    Fragmented process of data and documents housed in disconnected systems and repositories

    Frictionless flow of data through entire product life cycle, accelerating decisions, request facilitation and compliance

    Paper suppression and elimination

    Bulky, inconvenient paper-based product origination and servicing, providing infrequent touch points with customers

    Multichannel data collection and integration with information aggregators, and real-time updates for account transparency

    Platform thinking

    Proprietary, outdated transactional processing supplemented with wrapper technology, requiring significant maintenance effort and slow waterfall change program