Capsilon announced that 70 percent of mortgage lenders report that they expect total loan product costs to continue to rise in 2017, according to a recent survey conducted by the company.
The survey was conducted during the Mortgage Bankers Association’s (MBA’s) Annual Convention and Expo 2016, which took place October 23 through October 26 in Boston. Surprisingly, only seven percent of respondents reported that they expect total loan production costs in 2017 to be “somewhat lower” or “significantly lower” than in 2016.
The survey, which polled more than 100 executives from leading mortgage lenders, also revealed that more than nine out of ten of the respondents are somewhat or very interested in technology that automates key steps along the mortgage loan process, and 86 percent expect to spend more in 2017 versus 2016 on technology to reduce loan production costs by enabling a digital mortgage process.
In enabling the digital mortgage process, the lenders were asked if automating the consumer experience during the application process or automating key steps in the loan production process is most important to their companies, if they are both equally important, or if neither is important because their companies are not planning to enable a digital mortgage process. The results showed that 45 percent of the respondents stated that automating key steps in their company’s loan production process is most important, 37 percent stated that automating both the consumer experience and the loan production process are equally important, and 15 percent stated that automating the consumer experience during the application process is most important. Only three percent said that their companies are not planning to enable a digital mortgage process.
“The survey results clearly indicate lenders expect loan production costs to continue to rise, and they are looking to technology to reduce costs with automation,” said Sanjeev Malaney, chief executive officer of Capsilon. “In developing their digital strategies, lenders are right to focus on automating key steps in the loan production process, as this is where technology can deliver the speed, data integrity, and cost savings they need to gain a competitive advantage.”
Consistent with these findings, when asked what issues their companies are most concerned with, 73 percent of the respondents stated implementing the right technology, 51 percent cited rising loan production costs, 36 percent stated improving customer experience/customer satisfaction, and 16 percent cited longer loan turn times. Risk of regulatory penalties, hiring and retaining employees, and complying with TRID were each cited by fewer than ten percent of the respondents. (Total percentage is greater than 100 because respondents were asked to cite two issues.)