As lenders approach the increasingly tech-savvy market with digital mortgage solutions, consumer experience and back-office efficiency are top of mind. Is buying or building the right way to go?
The recent trend toward digitizing mortgage processes, inspired in large part by the growing millennial homebuyer demographic, was given a boost in 2020. As historically low rates created record-setting volumes, pandemic lockdowns and social distancing kept them at arm’s length from in-person transactions. Digital mortgage solutions offer lenders the opportunity to meet customers where they were while in many cases managing record-high levels of mortgage origination and refinance volume.
“Today, people are doing more electronically than ever before — attending online meetings, ordering groceries through mobile apps, and even touring and buying homes without ever stepping foot inside,” says Mikhail Cook, Senior Vice President of EXOS Technologies at ServiceLink. “In the area of mortgage, they expect their lender to provide a fast and easy experience, throughout the life of their relationship with their lender and servicer.”
While the pandemic may have illuminated the growing demand for digital lending services, it certainly isn’t a revelation for lenders, who have been aware of consumer interest in automated processes, as well as their potential for driving operational efficiencies, for several years. In fact, a 2019 report by Fannie Mae cited lenders’ top two priorities for maintaining or improving their competitiveness in the marketplace as consumer-facing technology and back-office streamlining — for the third straight year. In the same study, more than two-thirds of lenders (68%) said they expected online consumer-direct lenders to be their biggest source of competition in the coming five years.
It’s not surprising that many began moving into digitization through online application capabilities. When Ellie Mae reported in 2019 that 50% of borrowers said they chose a lender based on the availability of an online application or a portal (47% noted the importance of being able to upload documents electronically), lenders were paying attention. Unfortunately, many have stopped short of incorporating an end-to-end mortgage technology solution, which could take their customers well beyond electronic application, document upload and preapproval, to appraisal and closing scheduling, self-appraisal tools and even Remote Online Notarization (RON) capabilities. A more comprehensive solution also enables lenders to facilitate title, underwriting, closing and other back-office processes, which can result in benefits to borrowers, appraisers, signing agents and attorneys, as well as their own bottom line.
Building vs. Buying a Mortgage Technology Stack
Investment costs is of course a consideration in developing a solid technology infrastructure; so is the availability of talent. While some very large lenders have the financial resources and technology expertise to develop their own proprietary platform and opt to build out an integrated borrower experience in-house, others prefer to leverage the expertise and cost efficiencies of a mortgage technology partner. These partnerships may enable lenders to replace or supplement their existing technology at a fraction of the price, and in a fraction of the time it would take to build the tech stack in-house.
Lenders who partner with ServiceLink, for example, benefit from the company’s 50 years of mortgage industry experience, as well as economies of scale. ServiceLink’s EXOS suite of products and solutions are designed to create a mortgage experience that is faster, easier and more transparent for all stakeholders. For example, EXOS Scheduling gives consumers and their agents the ability to schedule appraisals and closings at their convenience; EXOS Valuations equips appraisers with a personalized calendar, real-time notifications and other tools to bolster their productivity; EXOS Title automates the title search and features a built-in decision engine that determines expected title completion and clear-to-close readiness in seconds; and EXOS Signing Agent provides scheduling capabilities as well as an overview of orders in the agents’ pipeline. These products combine for a streamlined experience that helps lenders close more loans, faster.
If you are interested in building a technology partnership, finding the right partner is crucial to your success. First, make sure the company specializes in mortgage; this is a complex industry where expertise is essential. Then, ask questions that will help you evaluate whether this potential partner is a good fit. You can start with these:
- What capabilities do you offer to create an excellent borrower experience?
- Does the platform take the borrower from application through close?
- How does the technology streamline back-office processes?
- How does it ensure compliance requirements are met?
- What type of security measures are in place to protect customer data?
- How often are updates to the technology made as well as new products launched?
- Does it incorporate user insights into updates and new-product development?
- How will its customer service team support us?
- Will its technology integrate with our existing infrastructure?
The final question is critical: technology should streamline, rather than disrupt. EXOS, for example, compliments lenders’ existing technology investments and workflows. The entire EXOS experience can be integrated directly into a lender’s point-of-sale platforms, making extending the digital experience less daunting.
The right technology partner should help you improve your performance and profitability, strengthen customer relationships, resolve issues quickly and keep your organization poised for progress in this dynamic, and sometimes volatile, mortgage market.