Three Ways AI and the Cloud Help Lenders Reduce Costs

Three Ways AI and the Cloud Help Lenders Reduce Costs

The consensus is out—industry experts say 2022 is going to be a great year for purchase loans, possibly even a record breaking one. And looking around, it’s hard to argue. Rates remain historically low and the economy continues to rebound from the COVID-19 pandemic.

Yet appearances can be deceptive. The reality is that mortgage lenders will have more challenges in the year ahead than they’ll know what to do with, perhaps none larger than the cost of loan production. In fact, according to the Mortgage Bankers Association, independent mortgage bankers saw their expenses rise from $8,668 in the second quarter of 2021 to $9,140 in the third quarter—the second highest amount on record.

Of course, lenders can only do so much to manage costs. But one of the most effective is cloud-based, AI-driven document automation. Here are three reasons why:

     1. Faster Processing

The MBA is currently projecting that purchase loan volume will grow to a record $1.725 trillion next year. However, purchase loans are invariably more complex and therefore more costly to produce than refinances. Lenders must also deal with a growing number of compliance requirements and a longer sales cycle driven by low housing inventory.

Lenders may not have much control over these obstacles. But they can get a handle on one of the largest cost centers involved in mortgage production: document management. In fact, a growing number of lenders are leveraging AI technology that automates mortgage document indexing and data capture by being able to read an entire page of information in a fraction of a second.

By instantly extracting data from a borrower’s pay stubs, tax documents and bank statements, AI-based document automation is already helping lenders accelerate the underwriting process and free up pipelines. In post-closing, it can also verify all key data and signatures in a loan file and extract critical data for federal reporting requirements and custom reports in just minutes.

     2.  Better Scalability

Sadly, the majority of document processing providers still augment their technologies with significant human assistance. It’s very challenging to scale any technology that also depends on people—especially if it involves scaling your own team, which is too often the case.

In fact, several of our clients came to us after attempting to use optical character recognition technology (OCR) to capture loan data. But because these tools were not nearly as fast or accurate as they were led to believe, they needed to have their teams do more of the work as they attempted to scale their operations.

The good news is that modern AI technology that automates document processing requires little and sometimes no human involvement. That means lenders don’t have to hire additional processors as purchase loan volumes grow. Even better, this technology can be hosted in the cloud, where there are practically no limits to its scalability.

     3.  Zero IT Costs

Today’s AI-based document automation technology isn’t just faster and more scalable, but lenders don’t have to sacrifice their own technology resources to get it, either. There’s no need to install any software, and no need to pour extra resources into data storage or IT support.

Paradatec’s AI-Cloud is a perfect example. It’s easily the fastest, most powerful AI-based document indexing and data capture automation technology on the market, and incredibly easy to implement and use. All lenders need to do is upload any number of loan files to a secure unique website address and our technology does the rest.

AI-Cloud delivers the same powerful, AI-based text analysis and machine learning tools that are being used to process more than two million loans a year, helping lenders convert information trapped inside loan documents into pure streams of actionable data. It also includes our AI library of more than 850 loan documents, which potentially enables lenders to start automating document processes in as little as a few hours.

Unfortunately, we’re kind of alone in what we’re able to do. Many technology and service providers claim to provide AI-based document automation. But when it gets down to brass tacks, there’s no “there” there.

That’s why we offer free blind tests of AI-Cloud—so you can see for yourself. Or just drop us a note at, and we’ll be happy to show you how to reduce your loan production costs next year—and increase your potential.


Our Clients Love Us

From originators to servicers, BPOs and external due diligence firms trust Paradatec to streamline document processing.

We asked a number of vendors, including the Paradatec team, to help us perform an extensive due diligence process that included an out-of-the-box, blind test with our own loan samples and proof of concept test.  Paradatec was the clear winner based on our comprehensive vetting process.

Steven Davids
Senior Vice President of Correspondent Lending, Northpointe Bank