Borrower Satisfaction & Digital Lending

According to the J.D. Power 2017 U.S. Primary Mortgage Origination Satisfaction Study, a total of 43% of mortgage customers indicate applying digitally in 2017, up from just 28% in 2016. However, satisfaction among customers applying online/via website has declined by 18 points year over year.

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According to that same study, trust is overwhelmingly the difference. Overall satisfaction among mortgage customers with high levels of trust in their loan representatives is 358 points higher than among those with low levels of trust. The top three elements driving that perception of trust are:

>>Representatives always calling back when promised

>>Continuity in working with a single representative throughout the process

>>Representatives proactively providing status updates

Rocket Mortgage is America’s largest mortgage lender based on Rocket Mortgage data in comparison to public data records. Rocket Mortgage is a fast, powerful and completely online way to get a mortgage for refinancing or buying a home, which was developed by Quicken Loans.

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Quicken is a household name. They had trust. They also had resources to be able to provide the transparency. This kind of loan volume doesn’t get closed because of just an amazing digital app. They had continuity and could afford to have a single representative working throughout the process. Someone was there to call back when promised. Etc. Etc. Etc.

To survive and to be able to enhance borrower customer satisfaction, brokers, loan officers, and lenders now require an intelligent loan manufacturing solution from a provider that truly understands mortgage banking and its constantly shifting mortgage process. The right digital mortgage platform helps you drastically reduce the chaos in your daily lending processes while improving communication to help you close more loans faster. This allows you to deliver an enhanced borrower experience giving you more time to do what you do best exceeding your borrowers expectations.

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In 2017, Lodasoft realized that the “Digital” solution wasn’t just in providing a rocket-like experience and incorporated intelligent loan manufacturing as away to give the mid-size lender and broker the best shot at competing with the top-25. We’ve leveled the playing field for our clients by allowing for system-driven and automated transparency and accountability that lenders of any size can afford to ensure that someone is there to call back when promised.

Lodasoft’s digital mortgage platform drastically reduces lending costs, chaos and cycle times to help you build a significantly more efficient mortgage business while providing a truly memorable borrower experience.

About The Author

Adam Batayeh

Adam Batayeh is President of Lodasoft, the mortgage industry’s leading solution to help lenders eliminate complexity and automate the manual workflow involved in the everyday loan process. With more than a decade of experience in the mortgage industry, Batayeh has held executive sales, marketing, product and strategic partnership positions with key mortgage technology providers. He is responsible for overseeing the daily operations, growth of organization, strategic partnerships and long-term strategic vision of Lodasoft. You can contact Adam at abatayeh@lodasoft.com or to find out more about Lodasoft visit website www.lodasoft.com

Bringing High-Touch To High-Tech

I’m the CEO of a software company, and I’m not afraid to admit that high-tech needs high-touch in order to deliver optimal results for lenders.

Lenders invest significant amounts of capital to transition to digital, and spend time training their employees to harness their newly acquired digital mortgage platform.

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Then software and web development teams configure technology solutions that deliver on the digital mortgage promise: simplified applying for borrowers, and streamlined processes and reduced costs for lenders. Better yet, the technology continues to improve every day. It seems like every time I walk by our development team, I see one of their computer screens displaying a new feature or customization.

Take this for example: You’re the COO of a lender. You meet with a couple mortgage software providers, pick your favorite, it develops a stellar digital mortgage platform, and you train your loan officers, processors, and underwriters on it. Job well done – well, not exactly.

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Business constantly changes—especially in today’s world, and especially in the mortgage and technology industries. Lenders need to adapt to continuously changing regulatory landscapes and borrower demands. High touch gauges arising issues and emerging trends. High tech, when coupled with high touch, allows lenders to adapt faster and more deftly than ever before.

For instance, perhaps the CFPB comes out with a new requirement for loan underwriters. Mortgage software providers can first implement functionalities for that new requirement into their products. Then, they can meet with their clients to train them on the new requirements and demonstrate how to satisfy the accompanying obligations through their digital platform.

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Another way software providers bring high-touch to high-tech is through analytics. Speaking for WebMax, we don’t just develop mortgage software and say, “Hey, good luck.” We become a part of our clients’ business. For START, our point-of-sale application, we analyze borrower behavior to see where users run into trouble or even worse, abandon the application. We leverage these insights to optimize our product, so that our clients close more loans.

Equipped with powerful digital tools, loan officers still bring high-touch to the loan officer-borrower relationship. I remember when I used to meet prospective borrowers at their homes and fill out forms at their kitchen table. While today’s loan officers might avoid those trips, they do miss out on some homemade treats.

That said, point-of-sale applications like START allow for loan officers to be more hands-on than before. Equipped with a two-way portal, loan officer and borrowers can simultaneously look at the same application and communicate. The loan officer can walk the borrower through the application, answering any questions along the way. Borrowers can get into their homes faster because when discrepancies need to be settled or additional documents need to be received, there’s no sending documents or communicating through phone, email, and in-person. It all takes place in one central location.

High-touch, combined with high-tech, provider lenders the most optimal digital mortgage platform. Moreover, it gets borrowers in their homes faster, with bigger smiles.

About The Author

Curt Tegeler

Curt Tegeler is responsible for providing direction for action to all employees and business initiatives. Tegeler’s main responsibilities include communicating and implementing the company’s vision and mission; leading, guiding, directing, and evaluating the work of executive leaders; formulating and implementing the strategic plan; forming, staffing, guiding, leading and managing WebMax; evaluating organizational success; and represents WebMax in civic and professional activities.

Be A Hero, Recapture Your Potential Borrower Leads

It goes without saying that lenders in today’s housing market face a much more burdensome task than their predecessors of just ten years ago. The financial crisis of 2008 forever changed the face of the American economy. The federal government enacted stringent regulations, which were designed to protect and prevent consumers without sufficient means from assuming “overly-burdensome” financial obligations. The recession also prompted many lenders and banks to re-evaluate their own general lending practices and qualification parameters, making it much more difficult for those consumers with less than stellar credit to obtain a mortgage. Implementing those barriers was necessary in some cases. In many others, consumers who would otherwise qualify for a mortgage are denied every day, irrespective of their actual ability to pay back those loans, because credit scores are now weighed so heavily.

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The aforementioned regulations promulgated by regulatory agencies and banks, alike, have made it much more difficult for loan officers to convert their leads into actual mortgages. Rising interest rates have also exacerbated the conversion difficulties by shifting trends from refinancing to much more of a purchase market. Finding a first-time homebuyer, who actually has the necessary credit score to qualify for a mortgage, is becoming more difficult by the day. According to a 2016 study published by the Federal Reserve Bank of New York, more than one-third of Americans have a credit score below 620. Even more alarming is the CFPB’s 2015 study that found in addition to those with poor credit, there are another 45 million adults who are either un-scoreable or who do not even have a credit score.

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The statistics seem to paint a bleak picture for loan officers and lenders, alike. Today, younger groups (such as millennials) who have the necessary credit do not prioritize home ownership, and those who do desire to purchase do not qualify. What if, however, there was a way to convert those unqualified applicants into viable candidates? What if there was a way to tap into a market that was previously inaccessible? Well, the good news is that there is a way. Not-for-profit companies have taken notice of the credit problems facing would-be home owners, and have gone to great lengths to work with those unqualified applicants to rebuild their credit while providing financial education.

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Loan officers across the country have begun to utilize non-profits by referring their unqualified leads for coaching and education. After the applicant completes the necessary courses and programs, lenders are often able to recapture those leads who now qualify for the financial product for which they initially applied. Although the not-for-profits were established for the purposes of helping those seeking to turn their dreams of home ownership into reality, lenders have become an indirect beneficiary of their services via an ever-increasing qualified applicant pool.

About The Author

Elizabeth Karwowski

Elizabeth Karwowski is the CEO of GCH360, a technology company that has developed a proprietary process and solution, which seamlessly integrates with the lenders’ loan origination software (LOS) and customer relationship management software (CRM) in order to create new loan opportunity and recapture leads. GCH 360 helped their partners create over $100M of new loan opportunities in 2017 alone, and plan on continued growth in 2018. As a recognized credit expert, Elizabeth has been featured on NBC and Fox News, and published in a number of financial industry publications.

The Foreclosure Rate Declines By 19%

Data from ATTOM Data Solutions shows shows a total of 189,870 U.S. properties with a foreclosure filing during the first quarter of 2018, up 4 percent from the previous quarter but still down 19 percent from a year ago and 32 percent below the pre-recession average of 278,912 per quarter from Q1 2006 to Q3 2007 — the sixth consecutive quarter where U.S. foreclosure activity has been below its pre-recession quarterly average.

The report also shows a total of 74,341 U.S. properties with foreclosure filings in March 2018, up 21 percent from an all-time low in the previous month but still down 11 percent from a year ago — the 30th consecutive month with a year-over-year decrease in U.S. foreclosure activity.

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An analysis of foreclosure activity by loan origination year shows that 45 percent of all properties in foreclosure as of the end of the first quarter were tied to loans originated between 2004 and 2008, down from 50 percent as of the end of Q4 2017 and down from 51 percent as of the end of Q1 2017.

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“Less than half of all active foreclosures are now tied to loans originated during the last housing bubble, one of several data milestones in this report showing that the U.S. housing market has mostly cleared out the backlog of bad loans that triggered the housing and financial crisis nearly a decade ago,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile we are beginning to see early signs that some post-recession loan vintages are defaulting at a slightly elevated rate, a sign that some loosening of lending standards has occurred in recent years. Consequently, foreclosure starts are trending higher compared to a year ago in an increasing number of local markets — some of which are a bit surprising given the overall strength of housing in those markets.”

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A total of 92,703 U.S. properties started the foreclosure process in Q1 2018, up 8 percent from the previous quarter but still down 10 percent from a year ago — the 11th consecutive quarter with a year-over-year decrease in U.S. foreclosure starts.

Counter to the national trend, 82 of 219 metropolitan statistical areas analyzed in the report (37 percent) posted year-over-year increases in foreclosure starts in the first quarter, up from 20 percent of markets posting year-over-year increases in foreclosure starts in Q1 2017.

Twenty-three of 53 metropolitan statistical areas with at least 1 million people (43 percent) posted a year-over-year increase in foreclosure starts in the first quarter, led by Indianapolis, Indiana.

Progress In Lending

The Place For Thought Leaders And Visionaries

Technology Can Be The Magic That Makes Loan Officers Shine

Will 2019 be the year technology replaces the loan officer? While this is the hot topic of conversation and the burning desire of venture capitalists, most realists have a different view, and I certainly don’t see a world where loan officers are going away anytime soon. While many homebuyers have quickly adopted tech to start the loan process, our research has shown most people still want guidance from a finance professional they can trust. Today’s borrowers want the accuracy, speed, and ease of use that they have come to expect from the always on and instant gratification that technology has enabled in their everyday lives, but they want it in tandem with advice from their chosen expert. As a result, today’s digitally inclined borrower is forcing lenders to re-think the front and backend tools they use to fund loans. With 99% of borrowers still relying on a loan officer to help close their loan, lenders who make it easier for loan officers to deliver on their borrowers’ expectations will win more volume.

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The loan officer is like an air-traffic controller, juggling the needs of many stakeholders while guiding the borrower towards a successful landing, the loan funding. They are under tight schedules, have to effectively communicate with stakeholders at the right times, are accountable for the accuracy of information and most importantly – everyone is relying on them to ensure the airplane makes it safely to the gate. When they succeed, everyone is happy — the buyer gets their home loan and everyone gets paid! To help loan officers, lenders need to provide the tools to make their jobs easier.

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The best technologies for loan officers will integrate well with other systems to digitally take the process from application to close. Lenders should look for web-based solutions that not only simplify the loan application, submission and closing process but also balance ease of use with compliance and security. Right from the start, the best solutions will give instant pricing, enabling faster lead response, and automatically issue the loan estimate (LE) so compliance is not delayed. Look for integrated systems that utilize machine learning and intelligence process automation to do the heavy lifting and reduce manual data entry and analysis. Loan officers that leverage technology have realized that they can build a better brand and see higher repeat and referral business.

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It is important that loan officers realize that technology is not replacing what they do, it is enhancing what they do to deliver a better and faster borrower experience.  Think of it as the magic that happens behind the scenes so that the star can shine!

About The Author

Sanjeev Malaney

With more than 17 years as Capsilon’s Founder and CEO, Sanjeev Malaney has proven himself as a visionary, a pioneer and a leader when it comes to the quest for bringing to market the true end-to-end digital mortgage. Capsilon has transformed the traditional mortgage process, enabling enterprise lenders to deliver a better borrower experience, help loan officers close loans up to five times faster and lower overall production costs by as much as 50%, by reducing massive staffing expenses that lenders ultimately have to pass on to the borrower.

Security, Profitability, and Compliance In The Cyber-Age

We don’t have to look very far to understand the damage of a data breach to individuals, corporations, and governments. Data breaches have become public relations nightmares; the cost to fix and identify the breach plus the costs to win back business hits the bottom line hard, or worse, leads to shuttered services.

In 2017 alone, 143 million consumers were impacted by the hacking of credit rating agency Equifax; the data of 51 million Uber users was stolen; and Yahoo revealed that all three billion of their accounts were hacked.

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As compliance management costs continue to mount, so do the costs to innovate and match the pace of advancing technology and data breaches. The result: Capital One exited the mortgage and home equity loans business in November of 2017 citing lack of profitability, marking a pattern of decline across the traditional mortgage and financial lending industry. Meanwhile, an uptick in agile digital lenders steadily filled the void, with Quicken Loans taking 4.9% of total market share in 2016.

The urgency to protect terabytes of data with legacy systems in light of the increase in cybersecurity breaches has put incredible pressure on the financial services industry to quickly secure its data, while simultaneously tackling complex compliance regulations and preparing for a new set of HMDA 2018 data requirements.

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How can we help the industry quickly adapt to protect its data, efficiently respond to compliance requirements, and maintain a profitable business?

Users of products and services from Microsoft, Amazon, Apple, and Google recently learned of security vulnerabilities in a wide range of computer chips installed on millions of personal tech devices. While the hardware was the source of the vulnerability, cloud-based software solutions closed the vulnerability. All it took was an automatic update.

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To successfully maintain a competitive edge in the mortgage and lending market during the cyber-age, securing the high volume of sensitive mortgage data is paramount. It needs a system that can immediately close security vulnerabilities and update compliance calculations and requirements through the ease of an automatic update.

Cloud-based platforms have revolutionized the security of dynamic document generation software with system infrastructures that increase the protection of consumer data and deliver safer, faster, and more user-friendly systems. This solves for several mortgage industry challenges: the costs to secure big data, protecting the myriad of personal, and much more.

About The Author

David Greenwood

David Greenwood is Chief Technology Officer and oversees all aspects of Asurity Technologies’ technology vision, strategy, and execution for the firm, ensuring that its innovative compliance solutions meet rigorous standards for quality, security, and resiliency. David has significant breadth and depth of executive leadership experience in IT management, technical strategy, solution design, and technology planning, development and delivery. Prior to Asurity Technologies, David served as Chief Information Officer at Promontory Financial Group, where he had executive leadership over corporate information systems and business applications. David was also a Managing Director, Technology, in the U.S. tax business of PricewaterhouseCoopers, with a focus on leveraging new technology to deliver innovative products and services.

Advancing eNote Adoption

MERSCORP Holdings, Inc. (MERSCORP Holdings) and eOriginal, Inc. have launched a new solution offering that will enable originators to accelerate entry into the digital mortgage ecosystem.

MERS eNote Solutions, part of the MERS eSuite, will enable the creation, execution, registration and management of the electronic promissory note, or eNote, to mortgage originators across the industry.

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“MERSCORP Holdings is proud to provide technology-based solutions that add value to our members’ bottom line,” said Brendon Weiss, MERSCORP Holdings Chief Operating Officer. “Our members identified several gaps that need to be addressed to increase eNote adoption, and this new solution fills a significant need for originators seeking to leverage existing vendor relationships.”

MERSCORP Holdings is the owner and operator of the MERS eRegistry, the national mortgage registry and legal system of record for identifying the controller (holder) and location (custodian) of the authoritative copy of registered eNotes. Interest in the production of eNotes continues to grow as consumers and lenders recognize the value of moving toward a more streamlined, electronic process. With more than 5,000-member organizations, MERSCORP Holdings is central to the growth of digital mortgages, and the new service provides a turn-key solution to those members who are driving toward a paperless process.

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“This solution will enable thousands of originators to realize the benefits of a digitally executed promissory note at the closing table. The eNote is the most important document of a digital closing because it is critical for the funding of electronic mortgages by investors,” said eOriginal Senior Vice President and General Manager of Digital Mortgage, Simon Moir. “MERSCORP Holdings, as the operator of the MERS eRegistry, has been instrumental to the advancement of digital mortgage. We are proud to have eOriginal’s technology power the MERS eNote Solutions.”

eOriginal delivers a fully digital mortgage and supports every type of digital closing strategy. By creating a ‘digital original,’ eOriginal guarantees trusted transactions of digital financial assets. Major financial institutions, leading law firms and credit ratings agencies have validated and rely on eOriginal as a trusted partner with the greatest depth of digital transaction management expertise to navigate and advise on industry best practices.

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Hopefully partnerships like this will move the eNote ball forward.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.