Qualia’s 2022 Homebuyer Sentiment Index surveyed more than 1,000 recent and prospective homebuyers. The results indicate that lenders must turn their attention to improving the closing experience they provide their borrowers in order to win repeat business and earn referrals.

The closing process is increasingly important for borrower satisfaction 

In Qualia’s summer 2021 homebuyer survey, we found that the majority of borrowers leveraged online tools to apply for their mortgages. To better understand how these point of sale (POS) systems impact borrower decisions to work with a lender, we added a new question to the 2022 survey asking future borrowers “when comparing mortgage lenders how will you choose which lender you use?” The highest-selected answer was “low rates” (49%) followed by “easy mortgage application process” (42%) and “quick response times” (40%).

These responses indicate that borrowers’ first impressions of lenders often hinge on the initial touchpoints a borrower has with their lender (i.e. how quickly a loan officer responds to the borrower’s initial inquiry for a loan and how simple it is to submit that inquiry). These responses may also indicate that many first-time borrowers are largely unfamiliar with the mortgage process and therefore rely on those initial impressions to make a selection. This underscores the value of POS systems for acquiring new customers via an easy-to-use online application. 

While POS systems are beneficial for acquiring borrowers, the closing process seems to be the most important factor for consumers when it comes to working with a lender again. In the mortgage industry, where customer retention rates hover at only 18% on average, this data indicates that lenders should take a closer look at their closing process in order to retain borrowers and earn more repeat business from borrowers looking to buy another home or refinance their existing home.

We asked recent borrowers “which of the following is important when evaluating whether you would work with a lender again?” The top 3 responses were “quick response times,” (42%) “how well they helped me through the closing,” (42%) and “on-time closing” (35%). 

These responses indicate that lenders should shift their attention more intentionally toward processes and systems that improve the closing process in order to earn more repeat business from borrowers or to earn business from new customers who are more familiar with the mortgage process. 

Achieving an optimized closing process: plugging into the settlement ecosystem 

Lenders simply do not have complete control of the closing process. They rely on their title & escrow counterparts to move a mortgage closing forward. Title companies begin tackling a number of tasks the moment an order is placed; however, from the lender perspective, the order essentially goes into a black box where they lose visibility into the progress of the transaction. 

Historically, lenders have attempted to solve this challenge through two approaches:

  1. Creating service level agreements (SLAs) with title companies to ensure requests and inquiries are being fulfilled in a timely manner. The challenge with this approach is that lenders lack reporting capabilities to gain global visibility into whether or not these SLAs are actually being met. 
  2. Leveraging point solutions to connect better with title & escrow companies. The challenge with these point solutions is that they typically only solve for one part of the workflow such as opening an order,receiving a quote, or getting a signature.

A new solution to this challenge is a system of engagement that connects into title companies’ operating infrastructure—in other words, integrated systems whereby the lender can plug into the settlement ecosystem. When the lender’s loan origination system (LOS) is integrated with the title company’s title production system, lenders can not only automate tasks associated with title & escrow companies (such as title ordering and information requests), they can also gain better visibility into the closing process through collaborative workflows. 

With connected lender and title systems, the process is also tangibly improved by eliminating redundancies in the lender and title workflows. A borrower can provide a piece of information such as their address a single time, and it will populate across all relevant files on both the mortgage lender LOS and the title & escrow company’s workflow software. This creates a more efficient flow of information, eliminates hours of work for all participants involved, and mitigates the risk of mismatched information within a lender and title company’s files. 

A more connected real estate ecosystem 

Qualia’s 2022 Homebuyer Sentiment Index demonstrates just how valuable a connected experience is for homebuyers. Lenders, title & escrow agents, and real estate agents simply cannot go it alone to create an ideal consumer experience—they must work in partnership with other transaction parties to drive a more cohesive and simplified process. 

To read more from the report and how the consumer views the homebuying journey from home search, to financing, to closing, click below to download your copy. 

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