Automated Compliance in Mortgages: All You Need to Know About Power Automate

A mortgage business was fined $2.25 million by the Consumer Financial Protection Bureau (CFPB) in June 2024 for providing incorrect Home Mortgage Disclosure Act (HMDA) data.

Compliance violations do not spare mortgage businesses. Even though they may not be subject to as much regulation as depository institutions, they must nonetheless comply with several state and federal regulations. Violating these laws can have serious legal and financial consequences.

Apart from that, non-compliance can lead to fractured workflows and damage to the company's reputation. While regulatory guidelines keep changing, the best way to stay on top of all compliance-related advancements is to automate the process.

This blog walks you through the benefits of automating compliance in mortgage with Power Automate, a high-end Microsoft tool designed to automate repetitive tasks. Let's get started!

What is Power Automate and How Does it Work?

Microsoft's Power Automate is a potent technology that streamlines how companies manage monotonous operations by automating them. Consider it your digital assistant, capable of establishing processes that smoothly integrate various services and apps.

Power Automate utilizes triggers (events that initiate a process) and actions to automate specific tasks.

Even if you're not a tech expert, you can use it because of its intuitive UI. Additionally, it seamlessly connects with other Microsoft products, such as SharePoint, Excel, and Outlook, making it a flexible option for optimizing processes.

These integrations help in a quicker and more accurate compliance process for banks and mortgage businesses. Additionally, Power Automate's high-end features help automate compliance by

• Cross-checking borrower document collection and verification processes
• Sending automatic reminders for missing or expiring documents
• Validating borrower information against compliance rules in real-time
• Checking for AML (Anti-Money Laundering) and KYC (Know Your Customer) compliance automatically
• Flagging suspicious or non-compliant documents for review
• Automating data entry into compliance systems
• Generating audit-ready reports of compliance activities
• Sending alerts for compliance breaches or incomplete steps

Benefits of Automated Compliance in Mortgages

With automation tools and internal controls, mortgage lenders can proactively comply with the latest rules. Here is a detailed account of how automation can help you scale compliance processes and boost internal operations.

1. Speed up your loan lifecycle

Automated compliance tools like Power Automate streamline every step of the mortgage process.

You can expedite approval times by verifying documents and reviewing regulatory requirements. Your clients receive assessments more promptly, and your team can process more applications without compromising quality.

For example, with pre-built templates, you can quickly set up workflows that automatically verify uploaded documents against compliance criteria. This means faster approvals and fewer errors!

2. Amplify compliance accuracy

According to DocuClipper, for every 10,000 recorded entries, humans made 100-400 errors compared to automated systems, which made only 1-4.

Hence, manual compliance checks are prone to errors, including missed documents, data entry errors, and outdated regulations.

However, automation ensures that rules are applied consistently, which lowers errors and ensures that every application is carefully reviewed. Additionally, this reliability protects your institution from compliance fines and reputational risks.

3. Seamless integration and data accuracy

Mortgage professionals often work with multiple systems, like

• Loan origination platforms
• Document management tools
• Compliance databases

Power Automate’s ability to integrate with these systems means data flows smoothly between them. When a new application is received, Power Automate can pull information into your compliance system > verify it > log every step taken.

This integration keeps data accurate and ensures your compliance records are audit-ready.

4. Tailored workflows for specific compliance needs

Every mortgage lender must adhere to different compliance standards, such as regional laws, privacy laws, or particular anti-fraud measures.

The power of Power Automate lies in its capacity to design unique workflows suited to your company's requirements.

For example, you can create a workflow that notifies compliance officers when something has to be done or automatically flags documents that don't meet your compliance criteria.

5. Audit-ready documentation

Regulators want thorough records of each stage involved in the mortgage approval procedure.

Power Automate facilitates compliance by automatically recording all communications into a consolidated, well-organized record. As a result, audit preparation is considerably simpler and less stressful.

Additionally, the desktop flows (RPA) features of Power Automate help in

• Data entry: Automates data entry from multiple sources into compliance and audit systems
• Form filling: Fills out complex mortgage forms automatically
• Web scraping: Scrapes data from websites or portals to gather borrower information or regulatory updates

Scale Operations with Automated Compliance in Mortgage

Mortgage professionals work under strict deadlines. Even minor compliance errors can bring in costly legal and financial repercussions.

However, lenders can stay on top of compliance checks by integrating Power Automate’s automated workflows, custom RPA, real-time alerts, and other high-end integration features.

Take your compliance workflows from a bottleneck to a strategic advantage with Mortgage Workspace. We offer tailored, smart automation services designed for mortgage companies.

Our Microsoft 365 Guardian services provide you access to advanced tools like Power Automate to minimize manual labor and achieve mortgage-specific compliance, created to meet state and federal standards.

Talk to an expert today to discover more about our Microsoft and compliance tools for mortgage companies.

FAQs

1. How does Power Automate improve mortgage compliance processes?

Power Automate ensures timely data collection and cuts down on any scope of manual errors to speed up regulatory adherence.

2. Can Power Automate help in pinpointing compliance issues early?

Yes, Power Automate offers real-time monitoring and alerts to let mortgage companies take a proactive compliance approach rather than a reactive one.

3. Is implementing Power Automate costly for mortgage lenders?

When compared to manual tasks and the possibility of fines from errors, automation is considered a cost-effective option in the long run. This is because it enhances overall operational efficiency and helps mortgage professionals meet tight deadlines.