Guaranty Home Mortgage Corp., a fast-growing independent mortgage banker that obtains loans through wholesale and correspondent channels, has picked Paradatec’s AI-Cloud to automate document processing and indexing.
Cincinnati, Ohio-based Paradatec, which claims to be the world’s leading optical character recognition (OCR) vendor, launched its AI-Cloud solution in September. Paradatec AI-Cloud uses document classification and data extraction technology that’s hosted by Amazon Web Services (AWS).
Documents are submitted to AI-Cloud for processing using a client-specific URL, and automated loan indexing technology breaks down every loan into more than 850 specific document types. Machine-learning tools and pre-trained libraries can transform more than 8,500 data points in mortgage loan documents into actionable data, the company says.
Guaranty Home Mortgage Corp. (GHMC) selected Paradatec after evaluating AI-Cloud and competing solutions over a period of several months. AI-Cloud enabled GHMC to reduce average processing time for a loan to be ready for review after document uploads from 30 minutes to 10 minutes, the companies said. The average time to review and correct loan documents was reduced from 40 minutes to 5 minutes.
“Paradatec was the clear choice based on our comprehensive vetting process,” said GHMC CTO Michael Rhoden, in a statement.
Paradatec COO Neil Fraser said the results achieved by GHMC “are quite typical for our customers,” and offered to set up one-day blind comparison tests for any lender.
“It takes only one day to see just what this technology can do, right out of the box,” Fraser said.
Founded in 1986 as Guaranty Trust, GHMC was a local retail lender until the turn of the century, when it entered the third-party origination (“TPO”) space. In 2019, the company was acquired by billionaire investor Gaylon M. Lawrence Jr. and rebranded as Guaranty Home Mortgage Corp. as it transitioned from a federally-registered trust to an independent mortgage bank. The company is licensed to provide mortgages in 48 states; New York and Hawaii are the exceptions.
Headquartered in Nashville, Tennessee, GHMC works with a nationwide network of mortgage brokers who originate loans through the company’s wholesale lending channel, and also purchases loans from “non-delegated” correspondent lenders including mortgage companies, banks, and credit unions.
Non-delegated correspondent lenders help borrowers select a loan, fill out their application, and provide the required initial loan disclosures and documents supporting the loan application. They then submit the loan file to a correspondent investor, like GHMC, for underwriting. Once it’s been approved, the correspondent lender closes and funds the loan, then sells it to the correspondent investor.
By taking advantage of the economies of scale and automating much of the application and underwriting process, wholesale and correspondent lenders aim to achieve savings that can help their originator partners win business by pricing loans competitively, and take market share from less efficient lenders.
According to the latest available records from the Consumer Financial Protection Bureau, GHMC funded $3.29 billion in loans in 2020, up 82 percent from $1.81 billion in originations in 2019.
Although known primarily as a direct lender, the nation’s biggest mortgage lender, Rocket Mortgage, is making its mortgage origination technology available to banks and credit unions as an end-to-end “mortgage-as-a-service” through Salesforce Financial Services Cloud.
In addition, Rocket Pro TPO — the division of Rocket Mortgage that works with mortgage brokers — has launched several initiatives aimed at strengthening Rocket’s value proposition to brokers, including tools to help brokers build and maintain relationships with real estate agents.
The nation’s biggest wholesale mortgage lender, United Wholesale Mortgage (UWM) in September launched a new self-service platform for brokers, BOLT, that automatically classifies and extracts information from documents, allowing mortgage brokers to get initial approvals for qualified borrowers in 15 minutes.
The company also has a new in-house appraisal capability, UWM Appraisal Direct, giving brokers the option of bypassing appraisal management companies.
Mortgage originators can also partner with vendors to automate and streamline their processes.
Google Cloud’s purpose-built mortgage solution, Lending DocAI, launched in April, helping partners like Roostify and Mr. Cooper automate data entry and create and customize document processing workflows. Roostify offers intelligent document processing to any lender via an application programming interface, or API.
Microsoft Cloud for Financial Services, which integrates cloud services across Microsoft’s public cloud offerings, launched on Nov. 1 with partners including Mortgage365 and Finastra, the developer of the Fusion Mortgagebot platform.
Like Paradatec’s AI-Cloud, Black Knight’s AI-powered mortgage solution, Underwriter Assist, also runs on AWS, using Amazon Textract and mortgage-specific algorithms developed by Black Knight to extract data from documents like W2s and pay stubs.
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