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This Lunch & Learn for mortgage lenders will explore the evolution of the appraisal process as well as opportunities for innovation.

Rohit Chopra pleads the fifth on QM rule

Consumer Financial Protection Bureau Director Rohit Chopra, in his first report to Congress, answered for decisions made by his predecessor, and provided some indication of his priorities going forward.

How servicers can access timely, accurate data insights

Learn how to navigate the challenges in today’s market – for example, the need for ongoing, on-demand access to near-real-time data and the ability to access those data insights in a timely and accurate manner. 

Which core segments of brokerage make the most money

Today’s HousingWire Daily is a RealTrending crossover episode. It features Tracey Velt, editorial director at HW Media Company RealTrends, who interviews Chris Kelly and Christian Wallace.

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Building the next generation of tech: Three ways to digitize home lending

Digital transformation focuses on improving an organization's success

Purchasing a home is one of the biggest investments most people will make in their entire lives, but the complexity of securing a mortgage can be a grueling and fractured process for first-time homeowners. At each stage of the buying process, there are multiple siloed transactions, from appraisals, inspections and settlements to mortgage payments and homeowners’ insurance. The home lending industry has a massive opportunity to digitalize to create efficiencies and to deliver a simpler end-to-end user experience that would benefit both borrowers and servicers.  

Digital transformation may sound complex and disruptive, but transformation can begin with small, meaningful steps. It is important to accept that digitalization is inevitable – customers are already hooked and there is no going back. The good news is that, rather than trying to reinvent the wheel, the home lending industry can get started by translating proven technology patterns, solutions and learnings from other industries that have successfully transformed customer experience and achieved tremendous efficiencies. There are some standout misconceptions about digital transformation, which is why it is important to focus on the ones that are most important. 

Digitalization Can Start Small 

“Digital transformation” often feels big and overwhelming. Before embarking on a mission to digitally overhaul the way an organization operates, it is important to go back to the basics. Clearly identify the goals you want to achieve and go after them in small steps. The most common goals revolve around improving customer experience, being more efficient through automation, and being nimbler to adapt to changes. There are two things companies should keep in mind: (a) start small and (b) don’t let perfect become the enemy of good. Many teams often get overwhelmed or burned out from trying to digitally transform their businesses all at once or from the top down, versus starting small and incrementally improving their operations first. 

The first step to all of this is taking time to reflect on what works and what doesn’t. Little changes in processes that already work can make a big difference. For example, a one-minute reduction in call time may seem small, but it becomes meaningful when you handle more than 600,000 calls each month. Mr. Cooper continually analyzes call patterns and extracts insights from its customer interactions in order to create efficiencies and improve customer satisfaction by providing faster resolutions. When somebody applies for a home loan, there are several handoffs and requests for information between the borrower and various internal departments. Information and context can get lost leading to delays and customer anxiety or dissatisfaction. Before trying to automate an entire process, consider investing in a basic foundational workflow technology that allows tasks to be assigned and tracked, in real time, in one system. An online portal, like Mr. Cooper’s Digital Loan Tracker, that allows customers to upload documents, interact with their assigned loan officer, and track their loan status at all times is another  example of incremental digitalization of a complex multistep process.  

No Need to Reinvent the Wheel – Put Your Customer First 

Digitalization in the home lending industry does not always require companies to entirely invent new technology solutions. There are many lessons the industry can learn from other companies that have successfully digitized their processes. Instead of working harder, work smarter to use and automate ideas that have been proven to work and are delivering positive results in other industries. 

For example, once the pandemic hit in early 2020, the retail industry was forced to adjust to lockdowns by making a bigger shift to e-commerce in order to sell online. Schools and colleges shifted to online classes. By pivoting to meet the obvious needs of their customers, several industries have accelerated their inevitable shift towards digital channels.  

The mortgage industry can make a similar shift, starting with taking a step back and evaluating what the process is like for homeowners to take out or refinance a loan. Currently, the mortgage industry is  inundated with paperwork and limited options to efficiently digitalize and process lending and servicing documents. By using new machine learning technology, Mr. Cooper has been able to process loan documents quicker and more accurately, helping close loans faster and provide a better customer experience. Combined with the adoption of eSigning technology, it is possible to further digitalize the mortgage process and avoid having to go through all the manual paperwork home buyers have had to contend with during closing. Customers are more open than ever to engaging through channels such as interactive chat. Mr. Cooper is investing in omni-channel technology to enable a consistent customer  experience across any channel – web, mobile, phone, chat, etc. 

Right Processes Drive the Best Results  

Digital transformation has taken every other industry by storm, and it’s time for the mortgage industry to  catch up. It immensely improves the customer experience, streamlines inefficient ways of operating and  makes it easier for servicers to make the home lending process more accessible. However, it’s important to remember that automating a bad process only streamlines the bad results faster. Before thinking about  automation adoption, it’s worthwhile to take a deeper look at the process itself and invest in re engineering the process before re-engineering the technology around it. Plus, finding win-win  opportunities can lead to even more success. For example, data extraction is crucial in saving time and unlocking business value as it both reduces team members’ time spent reading through dense documents and promotes customers’ seamless interactions with the organization. The best investment a company can make is in automation technology, but only after first ensuring that there is a clear call to action to reconfigure a broken or bad process.  

While the word “transformation” is often overcomplicated and can seem overwhelming, this era of digital transformation is really focused on improving organization success with the customer experience being top of mind. If you keep your customer at the forefront when making investments in technology, you will be able to adapt and grow to meet new challenges and transform within the ever-changing landscape of the mortgage industry. The process of digital transformation is not simple, and it will probably require several iterations, but it is a commitment companies will have to make in small but meaningful chunks to stay relevant in today’s world. 

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