Digital mortgages have made great strides in recent years. By leveraging the functionality of mobile devices, the digital mortgage is helping borrowers
streamline the process of applying for (and securing)
home loans. And, for lenders and mortgage originators, these streamlined processes facilitate faster
As a result, we are finally seeing the mortgage industry move into the 21st century. Borrowers can apply
for mortgages online or via a smartphone, generally
without needing the traditional initial documentation of a paper paystub, W-2, or bank statement.
But this first step into the next generation of mortgage origination is just that: a first step. The secret to
taking the next step toward a fully digital-mortgage
process across all channels hinges on the actual workflow of the entire mortgage process, and not just the
technology or data that enables it.
Traditionally, mortgage originators have started the
origination process by asking initial questions to identify whether their borrowers are looking to refinance
or purchase and in what general timeframe. Recent
advancements in technology have enabled originators to more accurately prequalify borrowers through
a workflow designed to better identify which borrowers may be eligible for a paperless mortgage
early in the process. These workflows are then used
in self-service operations or call centers — an environment that does not rely on face-to-face or phone
interactions — to provide borrowers with a more frictionless, hassle-free origination process.
To help achieve this, the industry requires new levels of data and insight into borrower credit. Consider
two individuals, for example: One is self-employed
and the other receives a standard W-2. In a digital-mortgage process, an automated workflow will begin
the same way as the traditional originator by asking
both borrowers about their respective needs. Are
they looking to purchase or refinance? What are their
At this point, however, the new process kicks in
and the workflow questions might ask: “Are you a
W-2 employee or are you self-employed?” It might
also ask: “Do you bank online?” Responses to these
more targeted questions help originators more
readily determine if a borrower might qualify for the
paperless process, which can remove the need for
time-intensive requests for verification of income,
employment or assets inherent to the traditional
This has been the most recent change in the
consumer-direct approach, but retail-branch lending
has not yet made this evolution in its processes.
Primarily, this is because originators at these mortgage companies are still meeting borrowers in person
at their local branch, based on Realtor referrals. The
process still involves sitting down with borrowers in
person and discussing all of the steps in the process.
Some loan officers are already asking borrowers
similar qualifying questions early in the process, but
mortgage companies will need to change workflows
within their loan origination platforms to support the
expedited digital-mortgage origination process. For
one thing, having appropriate workflows in place will
generally address the needs of loan purchasers, who
must be able to identify borrowers and verify they
went through the process correctly to avoid questions
during quality assessment.
At the very least, implementing basic workflows to
segment prospective borrowers may prevent an onslaught of unnecessary costs related to overall inefficiency throughout the process. The focus now should
be on the intentional use of these workflows to target
the right borrowers at the right time for the right loans.
While discussing the future of the mortgage industry,
we should consider how new efficiencies will transform the process. Historically, the mortgage process
has been reactionary: Consumers decide they want
to buy a house, and then speak with a Realtor, who
directs them to a mortgage originator. Thanks to a
combination of predictive analytics and mobile technology, we now are moving closer and closer to operating in an environment that allows borrowers to walk
into a house, deploy a loan application instantly and
close within two weeks.
Even today there are tools that allow borrowers to
get qualified or approved for a mortgage within minutes, before they even contact a Realtor. Borrowers are
being pushed into the market further down the sales
cycle, which is changing the traditional roles of mortgage originators and Realtors.
The level of engagement between these two parties will be critical for maximizing the benefits of
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Scotsman Guide Residential Edition |
ScotsmanGuide.com | May 2017 104
Seth Kronemeyer is vice president and vertical-marketing leader at Equifax
Mortgage Services. He is responsible for pricing, product management, product
marketing, campaign management, and mergers and acquisitions. Kronemeyer
brings more than 15 years of industry experience to his position at Equifax,
including marketing, sales, business-development and e-commerce expertise.
Prior to joining Equifax, Kronemeyer held leadership roles with Freedom Mortgage, Ally Bank
and GMAC Mortgage. Reach him at email@example.com.