For the last several years, much of the narrative surrounding the housing business (and HousingWire is just as guilty of this as anyone) has been focused on the digitization of the mortgage and home buying process.
Seemingly every day, there’s another lender or bank unveiling a digital mortgage process. And every few weeks, it seems as if there’s another iBuyer joining the market, offering homeowners the opportunity to sell their home with the click of a button.
But two of the top CEOs in the mortgage business said Friday that the “one-click” mortgage is not the endgame that so many people seem to think it is.
According to Movement Mortgage CEO Casey Crawford and Better.com CEO Vishal Garg, the human element will likely always be involved in the mortgage business.
And even beyond that, Garg said that the fully digital “one-click” mortgage is likely one to two decades from actually being a reality.
“The Amazon effect has taken hold,” Crawford said Friday during the keynote session at HousingWire’s engage.marketing conference. “A lot of folks are driving towards one-touch home purchase, being able buy the house with one-click. There are a whole lot of innovators that are moving that way: Zillow, Redfin, Opendoor, and companies like that. But we see the future as a marriage of digital and people.”
Garg told the crowd in Charlotte that he started Better.com (first known as Better Mortgage) after trying to buy his first home and seeing that the mortgage process was “broken.”
The initial goal of Better, according to Garg, was to create a lender that functions basically like the ETrade of the mortgage business, allowing people to complete the mortgage process on their own without ever speaking to a person.
And initially, Better found success in the refinance market with that model, but when the company expanded into purchase mortgages in 2017, the company found that most borrowers aren’t truly ready for a fully digital experience.
“People aren’t ready for ETrade yet. They need Charles Schwab,” Garg said. “They need a trusted advisor. Even up to last year, 85% of our locks had no human contact, but that’s probably only about 25% of the market. But people need hand-holding.”
And despite the push to go digital, Garg said the “one-click” mortgage is not actually close to becoming a reality, even for the people who want it.
“We know it’s going to be 15-20 years before it’s one click to buy a home,” Garg said.
“I’m a child of the '80s and '90s,” Garg said. “People want getting a mortgage to be like Contra, where’s just bang, bang, bang, but it’s more like Legend of Zelda, where sometimes it’s boring, sometimes you have to slow down to hear some of the story.”
And because of that, Better has shifted its model to be significantly more people-focused. “We’ve changed to delivering a service,” Garg said. “It’s become a lot, lot, lot more human.”
Crawford agreed, citing Movement’s mission to be a trusted resource for consumers.
“We exist to love and value people. To love is to act long-term in the best interest of another,” Crawford said. “And what people really want is to shop online and then talk to someone about. We see marrying up that digital capability with local people. It’s really about how you build trust within social networks.”
Building trust is a big portion of Crawford’s vision. It’s one of the reasons Movement got into the banking business in 2017. “We want to help people with their financial life,” Crawford said. “We think there’s an opportunity to rebuild trust in the banking industry.”
Garg cited the lack of financial education as a detriment to all consumers.
“People don’t know who to trust in financial services,” Garg said. “The education process is broken. There are still no financial education courses in high school. There are all these benefits of buying a house, but no one is teaching people that.”
Asked about a piece of advice the crowd could take back to their own companies, Garg said building trust is key.
“Examine every action, every communication and think, 'Does that build trust,?'" Garg said. The process is all about engendering trust. Do we build trust or take away trust? The American consumer is looking for the person they can trust, the company they can trust.”
And because of that, the “one-click” mortgage is not the destination, it’s just part of the journey.