InsightsInsulating Against Volatility with Tech-Focused Partnerships

The industry is bracing for the market volatility predicted to come our way in 2020. Interest rates are expected to remain lower through the first half of the year, with refinancing activity expected to drop during the second half of the year. Factor in a presidential election in 2020 and an uncertain geopolitical climate and the market outlook could go either way. In fact, Forbes senior contributor John Mauldin wrote, “I expect 2020 to be one of the most volatile market years of my lifetime.” [2]

So, how best to prepare for market uncertainty? Choosing an established partner is key. When markets soften, smaller service providers tend to struggle. When their vendors are going through dramatic organizational changes, it can prevent lenders from delivering high-quality service: ultimately negatively impacting their timelines, margins and consumer experiences.

Teaming with an established provider not only brings stability, but also the benefits of their tech stack. Technology plays a major role in helping to balance a volatile market. Automation reduces the need to ramp up and scale back hiring according to market cycles – bringing stability and consistency to organizations. It also allows them to react to market demands in real-time. Mortgage lenders have a limited time window to evaluate loan applications. With market competition and fluctuating rates, the lender that can close the quickest will likely get the business. Moving this process to real-time levels the playing field and allows all participants to better respond to opportunities.

“On the valuation side, the industry is really looking to take advantage of the tremendous amount of data available,” says Phillip King, vice president, principal product manager at EXOS. “We believe in automating as much as you can to make the experience as fast and convenient as possible for the customer.”

King’s area of focus, EXOS Valuations, helps to optimize human capital by bringing efficiencies to both consumer-facing and back-office valuation processes. Instant, digital appraisal scheduling, offered through EXOS, is both more convenient for consumers and reduces the burden on schedulers – and allows lenders to close loans faster by reducing appraisal cycle times. This added efficiency gives lenders the ability to insulate themselves against market changes.

“Borrowers want speed and ease,” says Marc Bator, vice president, principal product manager at EXOS. “Automating back office workflows, in addition to the consumer experience, leaves lenders better prepared for changes in the market. By increasing efficiency and reducing human capital costs, automation increases scalability.”

Back office technology can also help lenders prioritize their work effectively, so they can stay on top of increasing volumes or, in down markets, capitalize on opportunities as quickly as possible. For example, EXOS Express Pass provides point of sale decisioning on title orders – identifying the optimal clear-to-close path in seconds, including whether properties qualify for instant appraisal scheduling. Using this technology, lenders can swim lane loans: quickly bucketing those that can be closed quickly using digital technology and providing a human touch to those that require more attention.

Overall, partnering with stable vendors with innovative technology platforms can add the speed that borrowers demand while simultaneously reducing staff time and related costs – two factors that can help to keep the impact of market volatility in check.

1 Ramirez, K. (October 29, 2019) MBA: 2020 could absolutely see a recession. Retrieved from HousingWire – https://www.housingwire.com/articles/mba-2020-could-absolutely-see-a-recession/

2 Mauldin, J. (September 6, 2019) 2020 Will Be the Most Volatile Year in History – https://www.forbes.com/sites/johnmauldin/2019/09/06/2020-will-be-the-most-volatile-year-in-history/#7fdebc672d0e

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