In a host of industries, the promise of digital mar- ketingandcommerce, particularlythrough mobile channels, has exceeded the hype with consum- ers using digital channels to research and purchase everything from prepared meals to automobiles.
Expect the same to occur in the mortgage industry.
Today’s borrowers are displaying not just a preference, but an expectation, that they will be able to manage much of the origination process online or on their
phone. And mortgage originators are taking notice.
Two hundred executives working within banks,
credit unions, community banks and mortgage banks
of all sizes took part in a recent survey conducted by
Equifax. Of those, 44 percent surveyed say their most
urgent objective over the next 12 months is automating more lending processes and tasks.
The same survey data indicates that originators
recognize the importance of data analytics and intelligence in enabling this transformation. This was listed
as a top priority over the two-year horizon as companies develop new products and bring them to market.
The reality is that, in the current rising-rate environment today, mortgage originators who are the most
committed to improving the customer experience,
and to creating greater operational efficiencies, stand
to separate themselves the most.
Reshaping the business
Mortgage originators should understand that there
are fundamental changes happening, not only in how
they connect with borrowers, but also in how they interact throughout the mortgage origination process.
For generations, the process has been a reactionary
one: A borrower decides they are in the market for a
new home, speaks to a real estate agent, who in turn
may direct them to an originator.
Today, the industry is moving closer and closer to
operating in an environment that allows borrowers to
find a home online or via a mobile app, tour that home
in person and, while still there, deploy the loan application and close in as little as two weeks. Increasingly,
this is all happening within a single point of contact.
Consider Zillow, which has a command of the
home data, community data, comparable-pricing
data, school-district data and more, all through a
single app. With its recent announcement that it has
acquired a mortgage lender, Zillow now effectively
has controls within the entire lifecycle for a number of
This is actually reflective of a trend that has been
developing in our industry for some time. More than half
of mortgage originations are made through nonbanks
and nondepository institutions, according to another
study by Equifax.
Increasingly, these nontraditional lenders are win-
ning market share through their deployment of new
technologies — tools that automate more of the pro-
cess, provide greater levels of transparency and access
to information for borrowers. Most importantly, these
tools shorten the timelines to closing. All of this helps
to enhance the customer experience.
Most mortgage originators are generally already on
this path due to the impact of Fannie Mae’s Day 1 Certainty program. In place for more than two years now,
the program was designed to make the origination process simpler, faster and more user-friendly. The success
of the program hinges, in large part, on the inclusion
of third-party data that automates the verification process and subsequently helps reduce risk for originators.
print/over-the-air/display advertising promoting inter-
est rates; uniform mail-based solicitations to entire ZIP
codes or metropolitan statistical areas, etc. Essentially
a “shotgun” strategy to marketing versus a more highly
targeted “market of one” approach.
Sophisticated data and analytics give originators
clearer visibility into individual borrowers’ financial
situations, with the option to tailor their marketing to
suit. In doing so, originators can largely realize greater
return on their marketing investments by presenting
more relevant loan-product information to the right
borrowers at the right time.
Rather than view entire ZIP codes through a
homogenous prism, originators can market to different
personas within that same geographic region based
on actual aggregated demographic and financial
information. So, whether the opportunity lies with a
first-time homebuyer or an existing homeowner who
may be an ideal candidate for a refinance or home
equity loan, having the proper infrastructure and
workflow in place is necessary to identify and market
to these borrowers sooner and verify their income
and employment data faster, expediting the overall
Ready access to property and community information (as well as to more informed financial-management
strategies) has resulted in a much more prepared,
educated class of borrowers entering the homebuying
process. The market opportunity for originators lies
among this technology-savvy group of borrowers.
They are increasingly deciding to make their purchase
decisions based on the convenience, speed and quality
of the user experience over brand history or loyalty to
any particular lender. In the absence of these, today’s
borrowers have shown they easily can — and typically
will — seek out better options for themselves.
Originators who maximize the value of the resources
available to them — from improved digital technology
to access to alternative data and analytics — are much
better positioned to meet (and exceed) those borrower
expectations in the new era of the digital mortgage. n
Jennifer Henry is vice president and vertical-marketing
leader at Equifax Mortgage Services. She is responsible for
pricing, product management, product marketing, campaign
management, and mergers and acquisitions. Henry brings
more than 20 years of experience to her position at Equifax,
including operations, technology, marketing, sales, product
management, mortgage loan quality and loan-origination
services. Prior to her position at Equifax, she held leadership
roles at First American Mortgage Solutions and Fannie Mae.
Reach her at firstname.lastname@example.org.
Digital Reach Cuts Costs
and Attracts Borrowers
Mortgage companies can win market share through third-party data and analytics
By Jennifer Henry
can improve the
however, they must
attract them in the
In many ways, Fannie Mae’s Day 1 Certainty has
served as a catalyst driving companies to automate the
income-, asset- and employment-verification process
to better determine the borrower’s ability to repay a
loan. Automation and new technology is expediting
this process as originators increasingly seek to leverage
the mobile phone to onboard new borrowers.
Now, originators more readily validate that borrower’s
information (including credit, income, assets and employment) — which helps move borrowers through the
pipeline much faster. Instant access to income, employment and asset data will enable originators to counter
projected volume losses through operational savings
and the improved speed of response — without sacrificing loan quality or adding risk. This will help better position them competitively within the marketplace.
Marketing to digital natives
Before originators can improve the mortgage process
for borrowers, however, they must attract them in the
first place. This is one area where use of alternative
data can provide tremendous benefit. In many ways,
originators’ future success will depend on their ability
to proactively market to a new generation of “mobile
first” consumers, or “digital natives.”
Historically, if mortgage lenders were actively mar-
keting to potential borrowers at all, they tended to
rely on traditional, pull-based marketing approaches: