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When the house you love starts to show worn flooring, loved appliances and outdated fixtures it’s time to renovate. Most of us don’t have the budget to renovate the entire house. Nor do we have the capacity to do it all at once. Neither living with mom or in a construction zone is ideal. That’s why so many of us watch countless hours of HGTV. We’re looking for ideas on what would offer the biggest bang for our buck.
For homeowners, kitchen and bath renovations are always prioritized. They are what typically help “sell the house,” driving the most value from incremental improvements. Kitchen and bath updates also offer practical efficiencies for the family. The home’s new six burner Wolf® range bakes the family’s cakes more evenly and allows them to pull off a Thanksgiving dinner for twenty more easily. A master bath remodel offers two sinks for the family’s morning routine vs the inefficiency of the house’s original one.
This scenario is analogous to how business and IT leaders in the mortgage industry are looking at their tech stacks after a very busy two years. They see some parts aging, needing replaced. Other modern “amenities,” like cloud-native or machine learning technologies are not being leveraged in support of their initiatives.
Like it impacts homeowners, budget and resource constraints make it hard for mortgage leaders to replace all their technology at once. Without a “MGTV” (Mortgage & Garden Television) to get tips on what to renovate, leaders must pay attention to market trends, identify which processes/areas of the business lack the proper tools to support their goals and ultimately decide where the company could see the most immediate value from an upgrade.
Up until recently, many lenders were focused primarily on “renovating” front end borrower facing processes but conferences like this year’s Risk Management and Quality Assurance (RQMA) forum, showed us that the industry needs new approaches to ensuring loan quality in the year ahead. QC systems with flexible sampling, customized tests and robust reporting can provide immediate impact tackling emerging challenges. Key areas of focus are likely related to shifting and retraining staffs moving from refinance to purchase originations, managing fraud and defect trends that tend to grow in a purchase market, and ensuring controls for quality when adopting new product in the non-QM category to fill the gap left by lower refinance volume.
The mortgage servicing rights (MSR) market is also gearing up for a nice ride according to all expectations. As a result, mortgage organizations looking to capitalize on the opportunity need to focus on removing decade old technology causing friction in the file delivery portion of transactions.
These are just a few of the areas industry leaders may want to focus their attention on when considering where to focus a tech stack upgrade in 2022.
We heard several panelists at the MBA Annual conference this year discuss how it is becoming increasingly difficult to calculate technology ROI, given it tries to connect one thing to an outcome. The reality is, there are many components that drive business value. As a result, some shared they are focusing on people, process and technology to drive business value. This means taking the time to detail specific processes, determine how automation could change that process and investing in both technology and training to drive user adoption.
When looking at the dollars and cents of your investments, tackling one slice of the tech stack at a time helps leaders better understand overall ROI of a project. After the market swings the industry has seen lately, new technology and procedures using a “piece by piece” approach to renovating your tech stack is becoming increasingly important.
Another way to understand the impact your investment will have on your business is to do a robust due diligence on partners you’re evaluating. Understand the results their existing clients have experienced using that same technology. Plug and play with any available Try Before You Buy Programs to see how your users and data work within the new system.
And, If we’ve learned anything from HGTV, it’s that we shouldn’t hire a contractor that claims to be able to do the job for half the price and twice as fast as the other guys, because we know that quality work is always worth the investment in the long term.
If LoanLogics can support you in your 2022 tech stack renovations in the area of mortgage doc processing, loan quality management or asset acquisition, reach out at loanlogicsinfo@loanlogics.com or request a product introduction here.
