For more articles on leveraging
View these articles and more at
“Machine Learning Offers a Way Forward,”
“Big Data Is a Game Changer,”
Chami Akmeemana and Guy Pearce,
“Go All-in With Digital Technology,”
Joe Tyrrell is executive vice president of corporate strategy
at Ellie Mae. He oversees Ellie Mae’s product strategy, product management and business- and corporate-development
efforts involving a network of current and potential business
partners and merger and acquisition strategies. Prior to
Ellie Mae, Tyrrell served as vice president for Providian
Financial and has held other executive positions within the
mortgage industry. He has a bachelor’s degree in business
management from St. Mary’s College. Reach Tyrrell at
How eLending Transforms the Industry
The true value of a fully digital mortgage can be found in the data
By Joe Tyrrell
Digital mortgages have generated a lot of industry buzz in recent years, despite an ambiguous definition of what they actu- ally are. Some refer to digital mortgages
as a borrower’s ability to apply online in only a few
minutes. Others focus on the borrower’s ability to by-pass reams of paperwork and eClose a loan using a
digital device. Other definitions emphasize the various
steps between origination and closing.
The potential for an end-to-end digital mortgage is
tremendous. It can remove extraneous effort and costs,
and decrease the amount of time originators spend
on paperwork, giving them more time for selling.
It can help lenders make higher-quality loans to qualified borrowers. Most importantly, it can give homebuyers a faster, more convenient and more secure
It is no secret that the process for creating a mortgage loan historically has been cumbersome and inefficient. Automation technologies have greatly sped
it up, but there is still plenty of room to innovate and
improve. One way to remove time and cost from the
process is to ensure the right loans are being offered
to the right applicants.
Competing for borrowers
Conventional wisdom says that to fund more loans,
you need more applications. But given the stacked
competitive landscape, generalized marketing campaigns often struggle to yield the response and pull-through rates necessary for originators to capture
Rather than pursue application volume, smart originators focus on pursuing the right applications. By
employing new tools that allow them to engage consumers earlier in the process — at the “point of
thought” — mortgage companies and originators can
offer tailored solutions and support from the moment
the homebuyer embraces the idea of a transaction.
This strategy starts with originators’ most competitive
advantage: their own data.
Once a potential client is identified, an originator’s
next decisions are what marketing content to send to
that consumer and the optimal time to send it. This
is where machine learning can help. By analyzing all of
their historical customer data, originators can match
their marketing materials — everything down to message, visuals and specific offers — to those borrowers
with whom the marketing will most likely resonate.
A millennial homebuyer who is single and looking to buy in a city, for example, will not respond as
well to a piece of marketing that features a suburban
family standing in front of a minivan. And mortgage
companies certainly don’t want to spend marketing
time or resources soliciting consumers who would
never qualify for a loan.
Starting the process
Once the communication is sent out, it is time to really
engage the potential borrower. There is a lot of talk in
the industry about online applications, but we know
that not every homebuyer wants to interact the same
way. So, originators need to offer options.
An increasing number of homebuyers say they want
to start their loan application online. For those peo-
ple, the application and interface should offer a truly
intuitive, interactive and engaging experience. Rather
than offering rows and rows of questions, instead it
should feel like a conversation that turns their interests
and needs into an application.
Other homebuyers will prefer a hybrid approach.
At some point, they want to complete the application
process online, but they also want to talk with their
originator by phone or in person. When the borrower
wants that personal interaction, mortgage companies
need to be ready with the right person who can answer that borrower’s specific questions.
Every step of this experience needs to be highly personalized to the individual consumer. And, of
course, everything just described happens before
the consumer even gets to an application. The mortgage process is more than an application. In fact, the
application is just the first 20 minutes of a sometimes
two-month-long journey for a homebuyer.
Combining tech and touch
The real value of the digital mortgage is realized in
the origination process. With origination, there are
two major elements to consider. One is automation,
or high-tech. The other is a continuation of the personal consumer experience, or human touch. Both are
A recent survey of 3,000 homeowners and renters
looked at millennials who had just completed the
homebuying process and asked them what could be
done to improve the process. The majority wanted the
loan process to go faster. This is not a big surprise. The
second-highest rated request, however, was for more
personal interaction with the lender or originator
throughout the process.
So as lenders, mortgage companies and originators
think about digital mortgages, it goes beyond using
automation to make the process go as fast as possible. It’s also about using machine learning, data and
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