Let’s admit it, the mortgage lending process can be cumbersome.
As a technology executive at a major mortgage lender, I know this. But I believed the process was only flawed at other lenders. When my daughter and son-in-law recently bought their first home, I hand selected our best loan originator to handle their purchase. When the loan funded and they moved into their home I asked them, “How did it go?” They immediately praised the loan officer – he was great, provided sound advice, and everything went smoothly and closed on time.
Just what I expected to hear.
Then they disclosed that they had to resubmit W-2s and paystubs several times during the process. This was not what I expected to hear, and I’ll admit it was more than a little disheartening to learn that our streamlined process wasn’t quite as streamlined and customer-centric as I thought.
Fortunately, there was already a technology roadmap in place to remedy this type of inconvenience, but their experience really brought to life why it’s important for financial institutions, or any consumer-facing organization, to provide game-changing customer service.
I was sharing this experience at the recent Kofax Transform conference where the event’s theme, “Igniting Customer Engagement,” was the focus of my presentation.
Paper had been our initial concern, but we soon discovered that going paperless and streamlining processes was just the beginning. Ensuring agility in the loan process for both the borrower and lender, and leveraging technology to gain insight into every aspect of the loan process could completely transform our efforts to remove friction from the borrower experience.
Following are the four technology drivers I shared for igniting the loan origination process:
1. You can’t perfect what you don’t measure – the case for analytics
Are you able to measure how long the loan process is taking within each step – from loan submittal, to processing, to underwriting,to loan closing and funding? Each step should take 48-72 hours but that can be impossible when underwriting and the borrower are chasing and resubmitting documents.
Borrower engagement typically occurs every seven to 10 years giving you one opportunity to impress your borrowers with a solid experience. Analytics can track performance and identify the bottlenecks at each step to pinpoint areas for improvement.
2. For Millennials, mobility is imperative
Realtor.com recently reported that millennials will drive the majority of household formation in the next 10 years. In fact, in 2014 approximately 35% of loans were closed by millennials.
It’s important to have solutions today that will engage and be used by individuals who will be creating households and mortgages in the future. Meet them where they are – which is most frequently on their mobile phone. According to Zillow, 87% of millennials have their phone at their sides at all times. It’s a device with which they’re very comfortable conducting financial transactions. Many millennials have never been in a bank and prefer using their smartphone cameras to deposit checks and pay bills. Leveraging mobile technology to capture and submit documents is a must for all customer-focused lenders.
3. Automation speeds loan processing and drives efficiency
Rethink the entire loan process flow. Use process automation to extract data from documents and auto-populate applications and data integration tools to aggregate information from third parties digitally, eliminating the need for slow and error-prone manual data entry and paper submission.
4. Consider software that aids compliance
The ever-evolving world of compliance is a top priority that keeps us lenders on our technology toes and has the added benefit of improving the borrower experience. Regulations from the Consumer Finance Protection Bureau, including the upcoming August 2015 Integrated Mortgage Disclosure Rules, stress the importance of technology to successfully implement integrated e-disclosures and workflow systems to achieve timely loan processing. Look for software vendors that have mortgage domain expertise and can enable superior customer engagement while ensuring compliance.
A memorable customer experience can definitely be a game changer that goes beyond convenience and satisfaction. We received a great deal of positive feedback from loan originators and processors regarding the benefits of our new technology rollout. The bottom line, lenders exist to serve borrowers. We are enabling families to achieve the American dream of home ownership and establishing the right foundation for a long-term relationship, referrals, and repeat business well after the initial loan closes.