The mortgage industry is similar to other industries that have gone through a rapid igital transformation. Companies are par- ticipating in the early stages of moving
from marginal improvements of process to technology
becoming a fundamental enabler of change.
As the first wave of the digital mortgage approach-es ubiquity, brokers and lenders must now take on the
next challenges. Those include intelligently empowering their people, challenging the traditional process
itself all the while delivering tangible value creation.
There is no question that the pace of change in the
mortgage industry has set a new standard of expectations. The 2018 Home Lending Experience Radar from
PwC found that over three-quarters of borrowers submitted applications and documents online, stayed
engaged with their lender primarily over e-mail and
leveraged online educational tools about the mortgage process.
Borrowers, the study found, want to use multiple
channels to communicate and engage throughout
the lending process. And so, within the last five years,
nearly every mortgage originator and lender has begun to leverage digital tools to serve their borrowers.
The changing dynamics
As with any new wave of change, however, we’ve also
witnessed a cycle of success and failure. “Full-stack”
technology originators backed by millions of venture-capital dollars, yet lacking the understanding of
market dynamics, have come and gone.
Traditional lenders themselves have invested
millions of dollars in their own software experiences,
incrementally improving a process still built on
traditional workflows. Even our competitors in the
digital-mortgage space have made missteps, creating
user experiences that disregard what borrowers
actually want from their lenders.
This is why borrowers still score mortgages as difficult and why lenders aren’t seeing meaningful efficiency improvements. The same PwC study found
that many borrowers were still confused about which
documents they needed to provide, how to track the
status of their applications and how to understand
So, although digital-mortgage adoption is on the
rise, the Mortgage Bankers Association (MBA) reports
that production costs continue to escalate. The MBA’s
quarterly performance report from March 2018 shows
that the cost to produce a loan in fourth-quarter 2017
jumped to $8,475 — the second-highest quarterly
mark in the last five years.
The power of people
Borrowers have a basic need to connect with an
adviser through the mortgage process, a need that
becomes more visible in a purchase-driven market.
When Fannie Mae asked borrowers about their
present and future communication needs in their
2017 Mortgage Lender Sentiment Survey, borrowers
overwhelmingly reported that while phone and online
communication were important in their last mortgage,
in the future they hoped for more in-person interaction
with their mortgage lender, not less.
This finding is bolstered by other studies. Among
them are the April 2018 report by Owners.com and
the 2018 National Association of Realtors’ Home Buyer
and Seller Generational Trends Report, both of which
found that millennials use real estate agents more
than any other generation.
Mortgage executives are shifting their view of loan
officers as an expense, instead asking how to maximize
the return on investment of the largest line item in the
budget. Reallocating loan officers’ time from routine,
administrative tasks to allow them to focus on serving
borrowers and real estate agents is the top priority.
Supplementing the relational capabilities of the industry’s frontline people with technology that makes
Challenge the process