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Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.

Changing the message about mortgage lenders: From villain to hero

The media and the public overlook the mortgage industry's efforts

March 2, 2016

A hero can be defined as a company that partners with its clients to achieve customer delight. Such customer satisfaction can be obtained by allowing the customer to utilize the most recent technology and making sure the customer is protected by implementation of the latest laws. In addition, this hero is one that that helps its clients attain their dreams and, in doing so, promotes a healthy social and economic environment. 

Why then, are mortgage lending companies consistently portrayed as villains instead of heroes? While mortgage lenders are not completely altruistic as perhaps true heroes, due to their need to make a profit and to be a sustainable business, there is no villainous intent to deceive or hurt the consumer. In fact, the very opposite is true; lenders want to be able to provide the best product available to the consumer, in a sustainable business model while remaining in compliance with regulatory requirements.

Nevertheless, the message continuously exemplifies mortgage lenders as villains rather than heroes.              

Recently, one mortgage lender attempted to show the public how customer friendly mortgage lending can be, and how the process of applying for a mortgage perhaps can be as simple as “buying music and plane tickets and shoes” – without much hassle of paperwork and details. The lender, Quicken Loans, was then portrayed as a villain who was attempting to sabotage a recovering economy. Quicken Loans should have been applauded for its creative efforts and an attention-grabbing commercial that was aired during the Super Bowl.

Furthermore, the company should further be given accolades for showcasing how the consumer side of the mortgage process does not have to be daunting, but rather can be accomplished without fear and by utilizing the latest self-servicing technology, the mobile app. Given that the commercial did not create this dialogue, the question arises: How can we, as an industry, change the message so that the public accepts and applauds lenders who want to be partners with their customers and help them achieve the American dream?

Since the financial crash, the continuing message by the public and media has portrayed the lender somewhat as an enemy; the headlines and conversations focus on fines and penalties imposed by regulatory agencies upon the lenders. There is no recognition of the lenders’ endless uphill battle and efforts to comply with the increasing amounts of regulatory restrictions, while also absorbing the new costs associated with implementing the necessary technology so that they can continue to provide products to help their customers. 

Furthermore, the headlines lack examples where lenders are true partners to their customers and provide high quality customer service. 

Clearly, mortgage lenders need to perpetually work to change the message, and the power of social media cannot be underestimated. This is exemplified in the statistics following the airing of the mortgage commercial:  the CFPB’s message warning consumers to take their time when it comes to mortgages was retweeted approximately 300 times, while Quicken’s response to the CFPB’s message, noting that there is full transparency into mortgages and options, was retweeted about two times. 

The Rocket Mortgage commercial was one of the first attempts by a large player in the mortgage industry to change the message;  however it appears that the commercial took too far of a leap, particularly by implying that the mobile app will lead to issuance of a mortgage.  In fact, following this commercial, Quicken Loan’s magazine advertisements for Rocket Mortgage read, “Push Button Get Mortgage.” 

The public is not yet ready to understand that this advertising means the process for the consumer is easy, and the lender will still provide all the work behind the scenes to qualify the borrower. Furthermore, the public is not ready and does not yet have the ability to comprehend the lenders’ role as a true partner. Since the current negative message has been in place for almost a decade now, it actually is not all that surprising. How does the average American, who has read multiple  headlines about “fines” and “penalties” levied against lenders, digest a message by a lender that essentially says “trust me, this is easy”? 

Due to the historic public and media portrayal of the industry, there is simply too strong of an underlying suspicion of lenders to allow for such trust. Thus, the concept of consumers being helped by lenders to achieve the American dream in a carefree and seamless manner (the mobile app) is too much for people to understand without worries of ulterior motives and foul play. Perhaps the answer lies somewhere in-between – where the headlines neither continuously address lender fines, nor do they portray mortgage lending as a carefree, whimsical act.

The Rocket Mortgage commercial included some very valuable components of mortgage lending:  it exemplified the ease of applying for a mortgage loan and how potential borrowers can use self-service digital applications to do so. These improvements to the mortgage process were overlooked by the critics who took the commercial literally rather than for the greater message.

It is interesting to note that the mortgage commercial gets taken literally, when there are so many commercials for other products (such as chips and beer) where a literal interpretation would be much more concerning and offensive than the ease of applying for a mortgage. Those commercials, however, receive accolades from the public and media.

Nevertheless, to attract borrowers and to allow for a continuous supply of homebuyers, which inevitably promotes a healthy economy, the mortgage industry must continue to push to change the message. It cannot shy away from promoting the concept of utilizing technology, including self-service apps, so that it can demonstrate the ease of applying for a mortgage. 

However, it appears that in doing so, lenders will need to achieve a balance of demonstrating that while obtaining a mortgage is not difficult, it also is not overly carefree and whimsical. This carefully balanced message is critical so that the public does not see a fast and easy mortgage process as heading the economy back to a financial crisis.  

Would a better approach be to show a commercial where an underwriter is pouring over information, including credit, income statements, employment history and other detailed information, in an effort to qualify a borrower? It is interesting that most Americans have very little knowledge about what efforts are conducted behind the scenes of a mortgage application process. If if that type of a message was aired, would that really allow the borrower to trust the lender more?  The concept of the Super Bowl mortgage commercial was digestible for consumers; it was something they could understand and relate to — even if conceptually it pushed the needle a little too far.

Perhaps the question is not whether the consumer was ready, but whether the media poorly interpreted the message. The New York Times, Time Money, MarketWatch, and the Wall Street Journal all wrote about the commercial, observing the tweets and making commentary about the social media activity around it and focusing the discussions around the economic implications. 

Where was the commentary about how the lending industry is making the mortgage process easier for customers by embracing digital technology? How about observations about the fact that lenders are enabling more potential borrowers to take a “shot on goal” at home ownership and that lenders should be applauded for working to garner interest in a process that can appear daunting, but that can reaps rewards in the end? What about compliments to mortgage lenders who are trying to streamline a difficult process?

It has, of course, been said that publicity is a good thing, whether positive or negative. Could all of this conversation about a mortgage commercial, rather than a beer commercial, possibly lead to a few more borrowers benefitting from homeownership?  

Read more about this topic in the March issue of HousingWire Magazine: Bad press? Here's how to change media message

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