Last week our team joined thousands of mortgage professionals at ICE Experience in Las Vegas. We tallied thousands of steps covering the impressive conference floor to participate in nearly a dozen sessions.
The infectious energy at ICE Experience made one thing certain—the mortgage industry is ready and excited for what’s ahead. As mortgage volume begins to slow, lenders are turning inward to assess their operations and opportunities for improvement. We observed 5 areas where lenders are focused in the year ahead.
Implementing automation as the market slows down
Over the past 2 years, mortgage lenders have been focused on keeping their head above water amid an unprecedented purchase and refinance boom. Now, as the market slows down—and lenders can no longer rely on skyhigh volume to drive revenue—the impact of margin compression is much more acute.
Lenders are focused on introducing more automation in 2022 to drive down costs and increase efficiency in the mortgage process. The primary driver of this shift is time and the fact that lenders will simply have more of it. In one ICE Experience session, attendees were polled about what had previously held them back from implementing automation. The biggest culprit was “time constraints.” As the market slows down, we’ll likely see this begin to shift.
Reprioritizing borrower experience in light of a purchase market
As the market shifts from low-touch refinance transactions to high-touch purchase transactions, lenders are zeroing in on borrower experience. For the borrower, a purchase transaction can feel like the lender is asking them to “hurry up and wait” when the process moves into title and closing. The closing process is often lengthy and lenders historically haven’t had insight into how the closing is progressing to effectively update the borrower. Lenders are looking into ways to better integrate with title vendors to enable more consistent and reliable communication with borrowers during the closing process.
Lenders are also examining data integration to improve the loan application and approval process for the consumer. Borrowers are often asked to submit the same piece of information multiple times or in different formats (e.g. a bank knows a borrower has a joint account with a spouse but still asks the borrower if they are single). Qualia’s recent Homebuyer Sentiment Index found that nearly one-quarter (24%) of borrowers were required to submit the same piece of information more than once during the mortgage process. Lender need to integrate the data they already have about their borrower into their process to create a more streamlined experience.
Optimizing title & closing as a path to combat margin compression
Another resonant theme related to automation is title and closing. This is an often overlooked aspect of mortgage operations due to the lack of control a lender has in the title process. Several sessions spoke to the immediate ROI of automating aspects of the title and closing process with title vendors.
Additionally, eClose—which has gained momentum over the years—is maturing with a greater number of lenders actually implementing technology and processes to make hybrid and fully-digital closings possible. Large lenders spoke to the benefits of eClose including faster funding, less collateral suspense rate, and overall efficiency.
Employee training & development—no longer just a nice-to-have
Employee experience and retention are more important than ever—especially in a competitive market where borrower experience matters. As one speaker put it, “your customer experience is never going to be better than your employee experience.”
The mortgage industry is intensely focused on training and development to not only improve employee sentiment, but also to bring in the next generation of talent. There is great potential for lenders to increase efficiency through effective training programs that teach staff the bigger picture so they understand how to leverage technology to its highest potential.
Getting back to the basics to win business
Related to a focus on training, lenders are also keen to “get back to the basics”—especially when it comes to winning new business. As overall volume slows down and refinances are replaced with purchases, loan officers will need to revert back to their strengths in leveraging relationships for new and repeat business. Loan officers and others who interface with borrowers are reframing their mindset away from efficiently managing high volume and toward ensuring quality service.
One fundamental aspect of delivering an optimal customer service is response times. Potential borrowers expect quick responses during every step of the process—even before a lender wins their business. For example, borrowers now expect a near immediate message from a loan officer acknowledging the receipt of their mortgage application. Automation is integral to meeting this expectation and winning new business—and the best of these automated tools won’t take loan officers out of the equation, but will enable them to create higher-touch consumer interactions. As one speaker explained, “technology won’t replace loan officers, but loan officers who don’t use technology will be replaced.”