It’s peak tax season, and Shawn, a dedicated but overwhelmed escrow officer, faces the daunting task of manually calculating and paying property taxes for hundreds of properties. Unfortunately, in haste, he misses one decimal point in his calculations for the Smiths’ family home, leading to an underpayment.

When the Smith’s receive notice of the resulting penalties and interest fees for the shortfall, they’re shocked and frustrated, and Shawn’s company is forced to absorb the costs to address and rectify the mistake. As word spreads, their reputation is tarnished, and future business is jeopardized.

While this is an extreme hypothetical example, mortgage companies do face significant challenges in property tax servicing due to processes requiring substantial manual effort and are prone to errors. In this blog, we’ll share ways that Robotic Process Automation (RPA) can automate and improve the manual portions of the property tax servicing process, enabling staff to focus on high-value tax analysis and improving the overall customer experience.

Automated Tax Payment Processing

Rather than staff spending hours scouring local county databases, RPA bots can be programmed to search and retrieve property tax information. They can then calculate due amounts and submit timely payments, ensuring accuracy and preventing late payments.

Delinquent Tax Monitoring

Additionally, bots can proactively monitor for delinquent taxes by continuously scanning county record databases and automatically updating records with any detected discrepancies. They then alert you of these potential financial risks, enabling you to take prompt corrective action.

Tax Bill Data Extraction

RPA bots can utilize Optical Character Recognition (OCR) and IDP (Intelligent Document Processing) to extract data from tax bills, regardless of their formats—whether scanned documents, PDFs or other images. These technologies scan the documents, identify and read the text within them, and then translate it into a digital format. The bots then check this data for accuracy before integrating it into your mortgage servicing system. This automates the extraction and input of crucial tax information, significantly reducing manual effort and minimizing errors.

Payment Change Automation

RPA bots can also adjust payment calculations in response to tax changes or revised home valuations by continuously monitoring data from tax authorities and property valuation updates. When a change is detected, the bot will automatically recalculate the required escrow payments to reflect the new tax obligations or property values, ensuring accurate maintenance of the escrow account and preventing discrepancies.

Communication on Tax Updates

Bots can simplify the tax appeals process for over-assessed properties. They do this by auto-filling appeal forms with the necessary property and tax data extracted from various sources, reducing the time and effort required to compile and submit appeals. This enables mortgage companies (and homeowners) to respond effectively to changes in property taxation and valuation.

Client Communications

RPA can facilitate communications with customers about any changes in property taxes and escrow account adjustments by sending notifications based on the latest tax data and account recalculations. This ensures customers are always informed about their financial obligations and account status.

Audit Support

Additionally, RPA can assist in the audit process by organizing and compiling tax payment data, making it readily available for review. This can help improve regulatory compliance by ensuring that all tax-related transactions are accurately documented and easily accessible during an audit.

Scalability for Peak Seasons

RPA can enable mortgage companies to scale operations during the peak tax season by deploying additional bots to manage the increased volume of payments and customer inquiries. These bots work around the clock, processing tax payments, updating accounts and handling customer communications without the need for additional human resources. This ensures that even during periods of high demand, operations remain efficient, and the quality of service unaffected. Then, when the peak season is over, bots can be easily downscaled to reduce operational costs, ensuring resources are efficiently reallocated or minimized to maintain a lean operation.

Overall, the strategic use of RPA throughout various stages of the property tax servicing process frees employees to focus on more strategic, value-added activities. These include customer service, complex problem-solving and tax analysis. Finally, by automating repetitive tasks, RPA enables employees to engage in more fulfilling, impactful work, which can improve job satisfaction and spark innovation.

Mortgage companies seeking to modernize their property tax servicing and gain a competitive edge must consider RPA as a strategic investment. With two decades of experience in the real estate industry, TrueFocus Automation specializes in harnessing RPA for real estate professionals, including title companies, lenders and mortgage servicers, to help reduce errors, lower costs and achieve more with less time and effort. We invite you to explore the future of property tax servicing with our tailored RPA solutions, designed to meet the unique challenges of the mortgage industry.

Contact us today for a demonstration and embark on your journey toward operational excellence.