As tech and automation surge, one mortgage tech firm exposes why file quality still lags
Despite rapid advancements in mortgage technology, artificial intelligence, and automation, there are still issues with mortgage file quality, and these problems are costly.
LoanLogics, a mortgage tech company serving 60 percent of the largest lenders in the US, reported this summer that approximately 11.5% of all mortgage loan file content was missing or erroneous over the last 10 years.
Because of these issues, companies employ layers of quality checkers to ensure files are error-free. Dave Parker (pictured top), CEO of LoanLogics, said that because of all the companies that touch files during the process, it creates layers of redundancy that cause industry costs to skyrocket.
“It really creates the ability to eliminate redundancies downstream,” Parker told Mortgage Professional America. “In fact, we've even quantified the redundant efforts inside the mortgage industry. We look at the industry as a whole. It costs more than $90 billion every year to manufacture 6.5 million loans.
“And we see the level of cost takeout just from the redundancies as being worth $7 billion. That’s not so insignificant when you look at the cost of checking the checkers.”
These errors weren’t limited to a specific loan type or mortgage software, which surprised Parker.
“Across different loan types, we looked at loans that originated through different origination systems and point-of-sale systems, and they all had similar flaws,” Parker said. “So we did that assessment, and there really wasn't any specific outlier in all of this, which was surprising.”
Limited improvements in 10 years
Considering all the technological advancements, especially in the last few years, Parker was surprised to see that the data from this summer’s survey didn’t look much different than what they saw 10 years ago.
“We've been in the business for 20 years, and so we're running these metrics and looking at loan file completeness, loan file quality, and have been tracking that for year over year,” Parker said. “Despite the level of talk about automation, we're really not seeing improved data quality on loan files in 2025 over what we saw in 2015, and it's really a bit astounding.
Parker said one of the reasons there continue to be issues is that files are passed through so many different companies along the way.
“In the mortgage industry, there are a number of different intermediaries, from brokers to wholesale investors, lenders to aggregators, and even servicers to servicers, where everybody's checking the checkers,” he said. “You throw in diligence companies on top of this, PMI companies, investors, all doing diligence on loans. There's just a lot of checking the checkers, and we really see being able to match up the evidence with the data, and make that portable and trusted.”
That’s one of the things LoanLogics is trying to do to help the industry. The hope is that by creating a system where companies along a loan file’s journey can easily check evidence without introducing the possibility of errors.
“When you look at how we treat the contents, it's not a lot different than how it was done 10, 15, 20, 30, 40 years ago,” Parker said. “At LoanLogics, we see new ways of doing things, where you keep the evidence together with the data that comes from that evidence, and you make it accessible to any entity that wants to review it as part of what they do.”
A disparate industry
One of the biggest challenges in cleaning up these file errors is that there are so many technology providers across the industry. This makes finding consistency in the software being used at all stages of the loan challenging.
“When you look at the industry, it's still very disparate, and we see that disparity as very problematic,” Parker said. “There are 18,000 lenders, all with their own origination factory. If you extend that to brokers who are selling to lenders, you could add another 40,000 factories. But they're all disparate. They all have different technologies that they're interacting with.”
Kimber White of the National Association of Mortgage Brokers highlights growing strain on housing markets as the US government shutdown stalls USDA loans and disrupts flood insurance. He warns extended delays could have lasting financial repercussions.https://t.co/tbW0ZpMC5J
— Mortgage Professional America Magazine (@MPAMagazineUS) November 5, 2025
The mortgage industry is very fragmented, and some of that will never change. However, Parker hopes that new technologies can help bridge the gaps between those industry fragments. This can provide a smoother experience for the end customer and an error-free journey for the loan file.
“When you look at mortgage compared to many other industries, it's just not as connected,” he said. “The lack of collaboration is stunning in the mortgage industry, and that's really an area where we've already been in the passing lanes. Now, what we are doing is facilitating that with more technology solutions that enable collaboration on an ongoing, real-time basis.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
