The underwriting shortage could derail your 2021
Showalter believes that automating this process has focused too much on data aggregation and not on the real critical thinking work done by underwriters. He explained that data aggregation can speed up some processes, but the bottleneck is human mental capacity, as taking out a loan requires critical thinking, investigation and mental bandwidth on the part. of the subscriber.
Showalter also doesn’t believe dividing the underwriting tasks into manageable parts works. The logic of an assembly line does not apply. He likens this to dividing a police detective’s work into 12 separate tasks, it won’t result in more solved murders as this process requires critical thinking from just one detective.
Hiring more underwriters will also not solve the problem, Showalter explained, because building a competent, independent underwriter can take years. His solution, he explained, was to automate the critical aspect of the underwriter’s job, speeding up the processing of the simplest loans and saving underwriters’ mental bandwidth only for the most difficult tasks.
Showalter explained that Candor automates two forms of critical thinking from an underwriter. The first is the “thinking life” required to determine eligibility if that borrower qualifies for that loan. The second is a more difficult question that underwriters face: whether the information provided about the borrower and the property is true and meaningful given other information we know about the borrower and the property. This automated process, Showalter explained, draws on his and his team’s experience with forensic underwriting. These automated processes have been tested on 70,000 loans to date. Showalter claims the result is a 20-day reduction in cycle times.