Navigating The New Mortgage Maze

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JimMorinMany lenders are struggling as they try to reassess their business in the face of rising rates, new regulation and increased cost to originate. Finding the best way to navigate this maze of obstacles to get safely to the other side is surely a challenge, but it’s also the new reality.

As a full-service lender here at Norcom, we understand what our fellow lenders are going through. Regardless of what lies ahead, we at Norcom feel like we are well situated to succeed. How do I know that? From corporate philosophy, it all really boils down to our customers and being consumer-centric. Our corporate identity is based around our service levels. From our very beginning, our founder was an originator so we tout ourselves as an originating company built by originators.

What do I mean by that? Everything we do has the consumer and the originator at heart. We have a collaborative environment. We try to foster the relationships between the different departments and keep ourselves tightly knit as one big happy family. We feel that this strategy makes the decision-making process easier and cultivates partnerships within the building.

We have more of a horizontal hierarchy structure, rather than the traditional vertical structure.

As a company, we’re big enough to have access to sell into Fannie, Freddie and Ginnie, so we can operate and execute from a secondary perspective; yet we’re still small enough to be nimble and agile, thus maintaining our service levels, while remaining compliant. If we’re honest as lenders, in this day and age, compliance and technology dovetail together more than ever as a business imperative.

To this end, we take technology very seriously. Lenders that don’t do so act at their own peril. For example, we are now entering our second year with The Turning Point. The Turning Point is the mortgage industry’s most advanced marketing automation solutions that compliantly address every aspect of our lending business from prospect, to in-process, applicant, and closed loan marketing programs. We see our engagement with them as a core part of delivering on our philosophy of being a lender that is customer-centric.

We want everything we do to enhance the consumer experience, and at the same time, automate a lot of our processes. We are taking online applications, which automatically get pushed to our LOS system, which allows for documents to get drawn electronically.

Turning Point has really helped us at the back end of that process by automating our marketing process. For example, The Turning Point helps us with our five-year post-closing automated marketing campaign. We’re staying in contact with our borrowers for five years after their loan closes, and we’re actually in the process of deploying in-process marketing campaigns with videos to existing borrowers.

But the successful lender has to be about more than marketing campaigns and emails blasts. One of the reasons why we chose to go with The Turning Point and to use their award winning Mach3 system is compliance.

New rules and regulations are constantly being implemented, they are everywhere these days. And on the marketing side of every mortgage company’s operations, as much as any other, it means that our management has to take a much more active role in ensuring our brand and our products are correctly and compliantly represented in the marketplace. Communications with prospects, customers and even referral partners – whether driven from corporate or by our loan originators – must be controlled, but without inhibiting genuine creativity and individual initiative.

One of MACH3’s most distinctive features is that it establishes a controlled environment in which ingenuity and enterprise are able to flourish. It does this by providing our management with five levels of control over the players in the marketing process. All you have to do is decide what degree of control you want to exercise in relation to each of the system’s key functions. For example, you can make sure that Loan Officers are unable to edit company information or upload unacceptable graphics or run on-demand campaigns that breach corporate guidelines.

We have to make sure that every marketing piece that goes out is compliant. The Turning Point automates the marketing compliance process and does all the content management, as well. Through the system we are able to track open rates, and the actual content.

It’s funny that a lot of our lender peers are afraid of getting audited. We are not because we know that we have the technology from The Turning Point to prove that everything we do is compliant. How do I know that? We just had a regulator in our offices and they wanted to see all of the marketing pieces that we sent out in the last year. It was great to go into our The Turning Point’s Mach3 system, pull up the actual marketing pieces that went out, and just hand them over. Everything was fast, transparent and easily accessible, which made the audit almost a non-event.

Prior to using The Turning Point we had a marketing staff and they were just doing on-demand marketing. Since we started using The Turning Point, our marketing has all changed for the better. MACH3 enhances the Marketing Genius in our organization to drive business through increased efficiency with a custom company marketing library. Consistent, relevant communication can easily be sent to all our contacts companywide through each milestone in the loan process including the lead and post close stages.

But as any lender knows, it’s not just about marketing. We use Ellie Mae for our LOS.

In reality, between our front end website portal, we have a fully paperless automated system from start to finish. We have a client portal set up that allows the borrowers to go in and get real-time updates through a company called Lending Manager. We push messages back and forth; push documents back and forth, which then integrate with the LOS system. From there, within the LOS system, we’re pushing out automated updates to the borrowers and to the originators as they’re going through the process. Ellie Mae has been a wonderful partner because they seamlessly integrate to both The Turning Point and our website front end.

Our ownership, myself, and our compliance attorney are heavily involved with the MBA and spend a lot of time in D.C. going through these regulation changes. However, Ellie Mae certainly helps, especially with some of the lenders that may not be as tuned in to the compliance changes. In our case, Ellie Mae built out the QM and ATR functions that we employ.

Right now 85% of our business is purchase and first-time homebuyers are getting younger and younger, so we decided to go with yet another vendor to automate our front end. Our society in general is becoming much more comfortable and willing to take advantage of the Internet. People are more tech savvy. Today 79% of all of our online applications come outside the traditional business hours. Folks these days want to be able to do things at their convenience, in their own homes, at their own time, they’re on the fly, and they’re taking applications on iPads.

When we make these technology decisions, we have an IT department that presents options, or even some of the sales people will see or identify something that we should consider. So, basically someone comes up with an idea, sees it and then it gets presented to what we call our management staff that kick it around and make decisions. Any technology decision should be made collaboratively and have full buy-in from management.

For those remaining lenders that have opted not to automate, I think you better get started. The paperless mortgage is the future. We looked at several marketing vendors, LOS vendors and website vendors before making any decisions. Lenders need to be thorough in evaluating their options.

As we move more and more to a purchase market, we at Norcom are never going to get away from having a local presence. I think being in certain marketplaces is going to be important. However, the online channel is also booming. Borrowers are willing to shop online, buy things online, look at houses online, fill out mortgage applications online, etc.

If we put everything into perspective, if you look back just 10 years ago people wouldn’t even put their social security number online. Now we’re receiving hundreds of applications online everyday. Borrowers are filling out full 1003s online. As a society, we want instant gratification and technology helps us achieve that. In the end, you want to take advantage of the technology that’s available.

Bottom line, the next-generation lender needs to have the ability to be a dynamic thought leader. You have to have a willingness to continuously improve your processes. You have to be tenacious. More than anything, you have to be able to keep one eye on the present and one eye at the future at the same time. You have to be a forward thinker. You have to be willing to make change and change for the better.

Technology is a big part of what we do because it helps us fit all the pieces together. We have 25 years of lending experience. We have people here that have a lot of mortgage experience, yet we’re also young at heart. That inner youthfulness enables us to be dynamic. We are willing to embrace new technology. I think there are a lot of lenders out there that are still shying away from automation, but they shouldn’t. The new mortgage market is changing and the best lenders will change with the market.

About The Author

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James Morin is the Senior Vice President of Retail Lending at Norcom Mortgage, headquartered in Avon, CT. Since joining Norcom in 2009 he has helped grow the company to a Regional Lender that is now licensed in 18 states and was recognized as one of the “Fastest Growing Lenders in New England.” James has been instrumental in leading the strategic expansion of Norcom production and is in charge of Norcom’s retail platform, including the inside and outside sales departments, marketing, strategic planning, and product development, as well as training and overseeing the sales staff.