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It’s no secret that the mortgage industry has been a little slow to the table when it comes to the use of technology in handling loan originations.
Although the need was recognized, when the housing market was good, the timing was all wrong.
Why spend time and money searching for, developing, and implementing new technologies when everyone was making so much money? Most companies just added more people.
Now that times are a little tough and business is scarce, lenders don’t have or wish to spend the money on new technology, even though they well know it is needed.
They’ll allocate their resources to acquire more originators and products in attempts to reach more consumers. But, is that the best allocation of their limited resources?
Ironically, to reach new customers they need new technology. Today’s homeowners and home buyers are becoming more accustomed to electronic processes using online tools.
About 62% of those responding to a recent JD Powers survey who are under 35 and had recently purchased a home, indicated they used a mobile app for their mortgage loan.
Most home buyers today expect a lender to offer an online application, and further, expect them to have the online capability to communicate and provide documentation, as needed. Do you offer such capabilities?
To compete, a lender needs to have the technology to take an online application and to:
- Advertise and reach consumers online and through social media (more than just a website)
- Electronically price and lock loans online, real time (consumer facing)
- Gather verification documentation and validate it electronically, (can you say “Day 1 Certainty”?)
- Automated underwriting submissions, approvals and loan commitments
- Digital loan closings (online; real time; anywhere; anytime)
Consumers want information and communication in real time, not days or weeks later.
Transparency is as important as accuracy and honesty. They want to know what is happening with their loan, when it’s happening and why.
They want all this information on their timetable, available when they want to review it, at their convenience. To do this and minimize costs while maximizing productivity lenders need to:
- Have the systems in place to quickly review and deliver their loans for purchase or in-house servicing, with minimal, if any, delays.
- Technology to quickly identify and correct defects that may hamper a loan’s purchase or performance while increasing the number of loans handled per employee.
- Eliminate stare and compare reviews, in post-closing or quality control. Loan information should be extracted electronically from loan documentation for comparison against the LOS and other loan data.
- Ensure that the loan closed is the same one that was originated, approved and priced, for the correct consumers, on the right property, at an accurate value.
- Technology that can minimize defects, defaults, indemnifications, and repurchases.
To get the best bang for the buck, all this technology should integrate so information gathered and processed in one system or department is communicated and shared with all.
That’s the biggest challenge. Admittedly, it ain’t easy, but to succeed, and maybe survive, it’s necessary.
Where do you stand on the use of, or plans to implement, technology? Are you prepared to compete in the digital revolution? Don’t kid yourself, it’s here.
A little more than a year ago the Quicken Loans’ Rocket Mortgage was the big thing. Now there are many more variations of the online, electronic mortgage experience. So much so that consumers have now come to expect it. Can you deliver?
