The Strength Of Digital Lending

PRMG didn’t get to where it is today by putting its proverbial head in the sand. Founded in 2001, this privately held mortgage banker  and residential home lender is unafraid of change; constantly seeking out ways to improve efficiency, closing times, and create a better borrower experience.

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Although not a proponent of the bleeding edge, PRMG management is fully committed to staying on the leading edge of technology. That commitment was the catalyst for what has become the company’s own digital transformation.

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We knew that digital technology had become part of  everyone’s lives, but a conversation with one o four  branch managers drove it home. You know, 30 percent of my borrowers don’t have a computer, a printer or a scanner, but everybody has a smart phone. At that moment, I knew we needed to go mobile first, and do it with the best mobile platform out there. It was the best way to serve our borrowers.

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And so, the search began.

I literally spent a year interviewing and  vetting 30 different FinTech companies  that offered some kind of digital mortgage experience before making a decision. I wanted to find the best option for the long run, so I wanted to spend the time on due diligence. We didn’twantanyfalsestarts.

My first step was to look at the borrower experience that each solution offered.

For me, that’s what it all comes back to, the borrower—that experience has to be best-of- breed. So, part of the process was looking at the features and the user interface of the mobile solution—as well as our ability to customize and brand it. Would it help our loan officers connect with their customers and generate more business?

Because I wanted to make the best decision for PRMG the first time, I was quick to weed out the one-hit wonders early on.

I saw some companies with are ally good first version of a platform, but then saw that they hadn’t changed anything for two or three years. So, it’s important toask,‘When was the last time you updated?’ Yes, look at the product now, but also, take the time to watch how those firms and their products evolve over time. If they’re constantly ‘working on’ their updates, but nothing ever changes, that’s a red flag.

How does this make our process and operations more efficient? Can it help us get from application to underwriting more quickly? And, of course, does it integrate with Encompass? Those were our critical questions. It’s that combination of user convenience, mobility and operational efficiencies that make a true digital experience.

The last factor I evaluated was cost, comparing the price of the platform with the projected revenue gains (in terms of more business) and cost savings (in terms of operational efficiencies) it would bring.

After weighing all of these factors together, we determined that SimpleNexus was going to give us the biggest bang for our  buck. It had the features and offered the efficiencies we were looking for.  SimpleNexus also had a great relationship with Ellie Mae, and tight integration with Encompass, which was critical for us.

PRMG branded the customized version of SimpleNexus as NEO, which stands for Next Evolution of Origination. I was certain that I had the right combination of technology in place. However, the success of this initiative was dependent on adoption.

We have a distributed retail model, in which each individual branch functions like an independent broker. They have the ability to make their own decisions and devise their own borrower experience. Unless the solution is very good, this makes adoption a challenge, because we don’t force anyone to use what we introduce.

We started talking about NEO at an all- hands sales rally long before implementation, followed by an internal email campaign and video to generate excitement just prior to rollout.

We have 700 loan officers, with about 250 of those  funding two or more loans a month. In five months, 220 LOs have adopted and actively use NEO.That speaks to how good the solution is and the value it brings.

In addition to NEO, PRMG management is investing in the fundamentals—namely, a more advanced phone  system, and new computers for each of the company’s 1,800 employees.

It sounds so basic, but I’ve sat and watched how slow  some of those computers were. You can bring on all  of the innovation you want, but if you don’t also invest in the basic business equipment, you’ll slow down productivity. No magic bullet makes a computer with 8 gigs of RAM go faster. We now have a contract in which we update our computers every 36 months, so our staff will always use the latest, greatest technology.

PRMG’s new phone system seamlessly integrates with Salesforce, Gmail and a variety of marketing software, with the goal of increasing customer intimacy with every interaction.

We’ve spent a lot of time and resources building a state-of-the-art data warehouse for internal reporting, where we can measure the difference of how long it takes to collect borrower documents from loan officers who are on NEO(SimpleNexus)versus those who are not. I can tell you that those using the mobile application get these documents about two days faster than those who are not using NEO. So, the loan officer gets two days back to sell more business and the company becomes more profitable because we’re processing loans with less time and resources.

The tight integration between SimpleNexus and Encompass makes managing documents collected through the application easier, as well. When PRMG originators log into Encompass, they see a little envelope icon that tells them that documents have been entered through SimpleNexus. When they click on the eFolder, those documents, pay stubs and W2s are loaded into the Encompass eFolder. Everything happens automatically with no other manual intervention.

The way we’re set up, our e-consenting process and the loan application process is as efficient as it can possibly be. You literally send a text to your borrowers. Instead of going to the App Store or Google Play Store, they click on the link and download NEO. They have status, they have notifications, they have e-disclosures right there. We’ve gotten a lot of positive feedback from our borrowers, which I  believe will positively impact referrals and retention as time goes on.

In a few short years, I believe there will be an even  larger paradigm shift in our industry. Borrowers will continue to choose value and price, so, the perfect lending experience will be both the  cheapest and the best. That’s the challenge.

I believe that the more widespread adoption of machine learning and artificial intelligence will be key to operational efficiency in a low-margin environment.

I think competing is going to mean closing  loans in seven days with the lowest rate out there, and finding a way to do it profitably. That’s where it’s heading.

I predict the companies with staying power will be the ones that are embracing digital lending today.

Anyone in the industry has to recognize that  the digital mortgage is here to stay. We are in the middle of a fourth Industrial Revolution. The winners will be the ones that are taking action now, and making the investments that will position them to compete as the mortgage environment continues to evolve. The others will be left to watch everyone else lap the track while they sit on the sidelines.

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