Discussing Digital Innovation

At WebMax the name of the game is innovation. The company is 100% dedicated to helping lenders embrace a better mortgage process that is both digital and customer centric all at the same time. But how do you do that? Well, Curt Tegeler sat down with our editor to share his vision. Curt is President and CEO of WebMax LLC. He 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. Here’s how he sees the mortgage market:

Q: You say that innovation is vital to successful or game-changing technology. What innovation do you project for mortgage technology moving forward?

CURT TEGELER: First, I’d like to touch on innovation from the technology side because innovation isn’t just vital to good technology, it’s inherent. Innovation lives in game-changing technology’s DNA. We can’t forget that behind every technological innovation, every line of code, is a person, or group of people. These innovators constantly seek out new ways to do things and make processes better. People don’t make technology because it’s cool. People create new technology to solve problems, streamline inefficient processes, and improve people’s lives. Dee Hock, the founder of Visa, didn’t create Visa to have its name plastered at cash registers and on e-commerce platforms everywhere. He created Visa to provide a solution to a then disorganized and fraud-rampant credit card industry. Hock decentralized Visa’s payment processing system to give the power to its franchises, or member banks. In doing so, Hock revolutionized, and practically created, the fintech/payments industry. Visa was the hottest new thing on the payments block since the check. The point is, as long as inefficiencies, in any industry, exist, people will innovate and create game-changing technology.

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Now, let’s address the mortgage industry. We’ve witnessed this massive secular move to digital mortgages because, well, lenders suffered from a load of inefficiencies. Yes, of course, the move to digital also coincides with changing consumer preferences and our society’s transition from pens and paper to keyboards and touchscreens. In any industry, a business is nothing without its customers. Businesses must adapt to what their customers want, or in some cases demand. So if borrowers in general, and Millennials especially, demand a digital mortgage experience, lenders must meet them on the internet and satisfy that demand. That said, technology wouldn’t revolutionize the mortgage application and origination processes if it was less efficient than doing it with pen and paper. Take cars, for example. Consumers demand fuel efficiency. So, car makers dropped 6-cylinders and 4 and added a turbo booster instead, which proved to be more energy efficient and cost-effective while increasing horsepower and torque. The case is comparable to mortgages. Inefficiencies, coupled with consumer trends in behavior and preferences, has led to the digital mortgage revolution.

Q: What inefficiencies do you see in the mortgage industry? What innovation do you predict for lenders going forward?

CURT TEGELER: Lenders face many inefficiencies, but three key issues include the loan origination process timeline, rising origination costs, and borrower abandonment rates on digital applications. That’s why I think innovators will target digital point-of-sale (POS) applications in the near and intermediate future. A good POS application employs integration and automation, which reduces loan origination times and ensures valid information to produce compliant loans. This digital mortgage innovation drives lenders to close more loans faster. The integrations and automation that power the backend of digital POSs create a seamless application process for the borrower, which reduces completion time and origination costs. Automation does the work for the borrower, leading to decreased abandonment rates. Rather than sending borrower information to a credit or asset verifier, digital POS’s integrate with verifiers’ APIs. When borrowers input information, the POS simultaneously communicates with the APIs in real time. In effect, the POS verifies borrowers’ information while they complete the application. Borrowers need not fetch a bank statement; just plug in your account number and the POS will retrieve everything it needs. Lenders’ demand for these results will drive technology providers to brew another pot of coffee and get to innovating.

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In the long term, I think Blockchain has the potential to impact the mortgage space. Before I go on, I want to clarify that I’m not pandering to the pandemonium surrounding bitcoin and cryptocurrency. While I do see the risks and inefficiencies of the cryptocurrency market, I do recognize the power of its underlying technology, blockchain, and what it can mean for fintech. For instance, we’re seeing properties listed for bitcoin and nothing else. These could be marketing gimmicks or someone trying to flip their listing by jumping on the latest trend. However, with examples of this showing up regularly, it could be a sign of things to come in our industry.

All of the big banks are looking into blockchain technologies, and some have even filed for patents. Blockchain is all about transactions. Key examples include the transfer of shipments in logistics operations and the exchange of securities through trading on Wall Street. Blockchain might enter the mortgage industry a variety of ways in the coming years, whether through verifying the data collected through integrations, regulators and GSEs ledgering closed loans, or even processing the monthly payments made by the borrower. Blockchain is in its infancy stage, so the best hasn’t even yet been thought.

Q: You said that the length of the origination process and rising origination costs plague lenders nationwide. Can you expand on how the digital POS solves these problems?

CURT TEGELER: According to the Mortgage Bankers Association, the costs to originate a mortgage skyrocketed 80% in the last 7 years. At the beginning of 2017, the national average to close a loan stood at 51 days, up from an average of 30 days just 7 years ago as the burden of paperwork and broader requirements to vet borrowers weigh on lenders. The loan origination process always stood as a long, arduous, drawn-out series of sending documents for verification, waiting to receive them back, and then reeling in borrowers to sign and approve each step of the process.

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Then came 2008. The Housing Crisis dropped a bomb packed with regulations and compliance standards. Regulators posed new laws as recent as October 2015, with the passing of the TILA-RESPA Integrated Disclosure laws, which required lenders to send borrowers documents 3 days prior to closing. If any changes are made, they must wait another 3 days. In effect, timelines got extended as loans had to maneuver through an approval process inundated with checkpoints. Moreover, costs to originate increased as regulators pressured lenders to maintain compliance. The mortgage industry needed technology then more than ever, not to just adjust to consumer preferences, but to survive in the new lending world.

We discussed how integrations and automations streamline the lending process. As a result of receiving borrower information faster, lenders can start their compliance processes earlier in the loan lifecycle. Plus, borrowers can get pre-approved in minutes, equipping them with a budget and allowing them to start their home-searching process earlier than ever before. This resulted in faster loan closures.

As of November 2017, mortgage closures averaged 43 days, down from 51 days earlier in the year, a near 16% decrease. Although this is a great improvement we can attribute to technology, it still doesn’t satisfy those of us who embrace the digital mortgage revolution. All we can do is continue to innovate and drive that closure time down. By leveraging the seamless data integrations and automations engineered into digital POS applications, we can turn days-long processes into minute-long processes.

This affords more time to generate new business, so lenders cut costs and increase top line numbers simultaneously. When digital POS’s help maintain compliance, lenders can allocate more time to improving their respective companies’ loan process and borrower relationships. A good POS also reduces overhead costs. The newest POS’s allow the entire loan process to live in a single location. Borrowers and loan officers can upload documents at any time to share, communicate with each other important messages, and check for updates. Loan officers need not pay for shipping documents, nor spend money on lavish offices to entice potential borrowers.

Q: What about abandonment rates? How do digital POS’s factor into application completion rates and ROI?

CURT TEGELER: Lenders’ POS applications provide the majority of a borrower’s digital mortgage experience. Without an easy-to-use, user-friendly POS, lenders fail to convert applicants into borrowers. For instance, WebMax’s POS application, START, provides smart data entry and smart data elimination. What this does, essentially, is make it so the borrower can only input the correct information in the appropriate sections. Software developers need to create these products with the least tech-savvy user in mind. That said, we aim to erase any exit points for the applicant. Lenders can lose a potential borrowers at any hiccup, any roadblock in their digital application. In addition to navigating the application or not know what information to enter into which fields, START closes another key exit point for borrowers: time. START verifies data in real time by connecting to LOS’s, pricing engines, credit verifiers, asset verifiers, banks, and location services. These integrations ensure speedy results for the borrower while providing accurate, compliant information for the lender. As a result, START can pre-approve borrowers in less than 10 minutes.

START provides lenders a dramatic drop in abandonment rates. User experience is vital in reducing abandonment rates and increasing closed loans. The Fintech industry’s average abandonment rate of users who fail to complete an application fluctuates between 50-75%. The average abandonment rate of users using START stands at roughly 12%, providing a proven ROI on your integration by increasing completed applications by up to 84%.

Assuming the low end of the average at 50%, a conservative estimate, lenders can increase closed loans by 76%. Let’s assume that a lender attracts 100 borrowers per month, the average loan is $200,000, and the profit margin is 600 BPS.

>>With a 50% abandonment rate, the lender will close 50 loans. This equates to $10 million in monthly loan volumes and $600,000 in revenue.

>>With a 12% abandonment rate, the lender will close 88 loans. This equates to $17.6 million in monthly loan volumes and $1.056 million in revenue.

In this example, the difference between START and an average digital POS application equates to $7.6 million in monthly loan volume and more than $450,000 in monthly revenue. Annualized, this renders $91.2 million increase in loan volumes and a $5.4 million increase in revenue. This example does not account for other ROI factors such as decreased origination costs, reduced overhead, loan officer productivity, and streamlined workflow. Moreover, if we assumed the high end of the average, the difference between START and an average digital POS application equates to $12.6 million in monthly loan volume and more than $750,000 in monthly revenue. Annualized, this renders a $151.2 million increase in loan volumes and a $9 million increase in revenue.

Q: What role does a digital point-of-sale application play in attracting Millennial homebuyers?

CURT TEGELER: You might be surprised, but a digital POS plays a vital role in attracting all borrowers. According to a study by the National Association of Realtors, 44% of all homebuyers began their search online and 95% used online websites to gather information at some point throughout the process, including 99% of Millennials and 77% of Silent Generationers. That said, the data also demonstrates that capturing the Millennial buyer provides the most robust and lucrative opportunity for lenders, and that digital is the key to capturing that opportunity.

Millennials make up about one-fourth of the US population, signifying a 77-million-person opportunity for the mortgage industry. As the leading edge of this massive demographic reaches its early thirties, they enter their prime earning years, start families, and buy homes. The vast majority of this 77-million-person demographic will search for homes and mortgages on their smartphones, tablets, and laptops, just as they shop online. E-commerce volume increased nearly 12% y/o/y from 2016 to 2017. Expect for that same trend to follow people shopping for mortgages.

Millennials in the U.S. wield about $1.3 trillion in annual buying power, making them a significant force in the home-buying market and mortgage industry. 85% of them use smartphones as their daily technology device, and 49% seek to buy their first home. The October 2017 composite forecast of Fannie Mae, Freddie Mac, and the Mortgage Bankers Association for 2017 mortgage origination volume is approximately $1.8 trillion. If Millennials compose 50% of this mortgage volume, and two-thirds of them apply online via digital applications, that represents $600 billion in digital mortgage origination. This number is massive. Better yet, it’s conservative.

When it comes to attracting younger borrowers, lenders’ digital platform poses so important that it can outweigh the impact of interest rates. Lender A might offer a mortgage at 4%, while Lender B offers it at 4.25%. But if Lender A fails to show up in search results or deliver a subpar digital experience and Lender B does, Lender B will win the borrower. Millennials feel most comfortable transacting via digital. They don’t go to the mall, they go onto their laptops and shop e-commerce platforms. That’s where an industry-tailored mortgage website factors in. Once online shoppers fill their cart, they enter the POS application. Yes, a mortgage POS is much more complex and information intensive than an e-commerce POS. But that doesn’t mean lenders can’t provide an easy-to-use mortgage shopping experience. Lenders leverage their website to gain digital traffic and attract more borrowers. An effective POS ensures that they convert their shoppers — or applicants — into borrowers.

Q: You consider yourself a “first responder” to real estate and mortgage. How are you a first responder to POS?

CURT TEGELER: In 1999, I provided realtors, especially the smaller ones, the ability to compete in the dot-com boom and seize the power of the internet. In 2008, the Housing Crisis left the mortgage industry in shambles. I was there, in the rubble. I didn’t just help clean up the mess; I started building. I created MortgageWare, a digital mortgage website solution equipped with a proprietary content management system and integrations to LOS’s, pricing engines, the whole bit.

I’m a first responder to POS, because, well, we created START to satisfy our clients’ demands. They had this awesome website that attracted the digital traffic they craved. The problem was, it didn’t result in the increased loan closures they hoped for. They needed more. They needed a better applicant-borrower process. So, we made START to make our clients’ transition to digital accretive to their top and bottom line.

INDUSTRY PREDICTIONS

Curt Tegeler thinks:

1.) Digital point-of-sale applications will dominate lenders’ cap-ex and investments.

2.) Integrations and automation will drive the next leg of the digital mortgage revolution.

3.) Despite rising interest rates, the housing and mortgage markets will post a solid year of growth as buyers rush in to lock lower rates.

INSIDER PROFILE

Curt Tegeler is President and CEO of WebMax LLC. He 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.

Assembling Your Symphonic “Dream” Team

I know that when lenders think about Capsilon, they think of it as a digital document management company. Little do many know that over the last several years, Capsilon has been stealthy developing a streamlined series of product solutions that together will deliver an end-to-end digital mortgage. With the shifting of its product offering from a single solution to a comprehensive service, the company has evolved to a point where a new approach was needed to take it to the next level.

Less than a year ago, I joined Capsilon as Chief Operating Officer. In this role, I was charged with fundamentally transforming the business to accelerate growth, expand lending partnerships and further tech innovation. While I have over twenty years of experience in a variety of roles leading enterprise SaaS companies and was most recently a General Manager at Oracle, I realized, as much as I was ready to roll up my sleeves and dive in, I couldn’t do this job on my own. I needed a “dream” team, and fast.

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Building a leadership team is a little bit like staffing a symphony. For the orchestra to perform optimally, each performer needs to be in sync with the music, the conductor and each other.  One instrumental section cannot be more dominant or take attention away from another and each musician needs to practice on their own time so that when they come together they can create beautiful music. Often musicians have been playing together for years, so they are comfortable with each other. The conductor leads the musicians by keeping time to the music and guiding the transitions, but this can only happen if the conductor trusts musicians to do their job, so that they can do theirs. Too much focus on one section, the “more cowbell” Saturday Night Live sketch with Will Ferrell and Christopher Walken comes to mind, and the beautiful music of a symphony turns into a cacophony.

With a focus on scale and growth, our symphony needed to evolve. In 2001, long before the emergence of any FinTech startups, founder and CEO Sanjeev Malaney had the vision to build a company that would leverage technology to automate and streamline the traditional error-prone, time consuming, and outdated mortgage process. A pioneer in the industry, he focused his energies on developing single solution products with the goal that they would one day work together to deliver a comprehensive solution. The company’s digital mortgage platform is built around Sanjeev’s patented technologies for automated document recognition and data extraction, which has helped make the concept of a paperless mortgage a reality. As a result, Capsilon was first-to-market with an end-to-end digital mortgage solution that helps lenders save time and money and delivers a better experience for loan officers, correspondent lenders and borrowers, yet few know about it. And while Capsilon’s customers are thrilled with the ability to close loans faster and radically reduce labor costs, the makeup of Capsilon’s existing customer base of the mortgage industry’s most innovative companies, including three of the 10 largest residential mortgage lenders in the United States, makes it imperative that Capsilon’s product technology continue to innovate and scale.

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Bringing to market a truly innovative mortgage process that improves both the borrower and loan officer experience from application to closing is a complicated undertaking that requires expertise in a range of disciplines. To optimally build a stellar leadership team, I focused on balancing the expertise and unique strengths of each stakeholder.  I looked to hire experts in their fields who I had a history with and who were comfortable not just innovating an industry, but were looking to disrupt it.

To help drive Capsilon’s go-to-market engine, we tapped Ginger Wilcox as SVP of Marketing, and Mark Gordon as SVP of Sales. Ginger, a startup veteran and recognized leader in the mortgage, real estate and technology industries, is responsible for leading marketing, brand positioning and growth for all Capsilon products. Most recently, Ginger was part of the team that launched digital mortgage startup, Sindeo, serving as CMO and Chief Industry Officer, and prior to that she was at Trulia. In addition to deep industry expertise, Ginger has solved some really tough problems for top-performing mortgage, real estate and software companies. She was an early adopter of technology and uses it to drive growth in unconventional ways. Capsilon will benefit from her deep understanding of the borrower journey and the pain points that impact the mortgage process combined with her cutting-edge approach to marketing and growth. And, of course it helps that she is one of the most-connected people in the housing industry, which enables us to think about partnerships in entirely new ways.

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With more than twenty-five years of experience as an enterprise technology sales leader primarily focused on enterprise SaaS solutions, Mark is responsible for managing and developing the sales organization. Prior to joining Capsilon, he served as Senior Vice President of Global Sales and Customer Success at iTradeNetwork, where he led sales of enterprise-level SaaS solutions for trading networks and business intelligence. Since joining, Mark has already impacted Capsilon’s bottom line by changing how the sale team interacts with prospective customers, evolving from a product feature focus to a customer-centric mindset and providing the solutions lenders and services need to modernize their mortgage production and servicing operations. As a result, the sales team doubled bookings in less than six months, which we attribute to adding a great coach to an already strong offering and team. Bringing Ginger and Mark together has given us the opportunity to elevate our go-to-market strategy and tell our story in a different way.

When it came to product and engineering, I had a different challenge. I wanted people that Sanjeev could also trust to manage these departments and also help Capsilon continue its transition from a single solution to a complex, multi-layered product suite that could scale to meet the needs of the biggest lenders. Steve Viarengo, SVP Products, and Dimitri Daveynis, SVP Engineering were the perfect combination to lead this effort.

It’s always nice to be able bring the band back together and recruit people you’ve had great experiences working with in the past. I’ve known Steve for 19 years and worked with him for eight years. Early in our careers, we worked together at CommerceOne and later, I had the opportunity to work with Steve at Oracle in his role as VP of Product Management for Oracle’s HCM Cloud. Steve brings deep expertise driving product development and building enterprise software solutions that not only scale, but also delight users. And because we have worked together for so long, we immediately started off hitting the “right notes.” Steve is now responsible for all of Capsilon’s critical product functions.

We had the same challenges with engineering as we did with product. Sanjeev wanted to find someone that could continue to innovate the product and scale the infrastructure, and fortunately, we have found that in Dmitri. Not only does Dmitri have more than two decades of software engineering and technology operations leadership in high-growth SaaS environments, he has the personality and “good guy” traits that Sanjeev can truly trust. Dimitri is responsible for Capsilon’s global engineering team tasked with delivering innovative solutions that accelerate production for large mortgage companies. Prior to joining Capsilon, Dmitri served as Senior Vice president of Engineering and Chief Technical Officer at Quantros, a leading healthcare technology company focused on improving healthcare quality and safety performance. While there, Dmitri built a high quality, scalable and secure platform serving more than 2,000 healthcare facilities and 7,000 retail pharmacies. With this background, Dimitri is well qualified to build a solution that benefits large scale lenders.

As you can see by my highlighting each individual’s background and expertise, a symphonic “dream” team marries a wide range of skills, perspectives, disciplines and expertise. While each has their own sphere of influence, they all must have the right personalities and willingness to work together as a team. I am happy to say, nearly a year later, that driving Capsilon’s innovation is a seasoned and successful management team with significant mortgage, SaaS and FinTech industry expertise, including top executives from Oracle, IBM, iTradeNetwork, Quantros, Sindeo and Trulia. These accomplished leaders, with diverse educational backgrounds and experiences to guide them, are infusing Capsilon with fresh ideas and new approaches to old problems.  I am energized by their willingness to take risks and work together to realize their shared passion of delivering the true end-to-end digital mortgage.

About The Author

Making Moves

The smart lender is not sitting around. They are making moves and they are succeeding. Lenders can win in this market.

For example, Reverse Mortgage Lending, Inc., a San Diego–based HECM provider, ended 2017 with record growth and received top honors from partner Liberty Home Equity Solutions. Reverse Mortgage Lending CEO Collin Knock attributed the growth to his team and credits them for earning Liberty’s Top TPO Sales Producer award for the final quarter of 2017.

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The fourth quarter Top TPO Sales Producer award from Liberty Home Equity Solutions recognizes Reverse Mortgage Lending as the highest volume seller from all of Liberty’s 500+ TPO brokers nationwide.

According to Bill Nolan, Correspondent & Affinity Sales Leader at Liberty Home Equity Solutions, the “business model was clearly well thought out and managed aggressively.” Nolan also noted that Reverse Mortgage Lending’s “volume generated in Q4 would approximate to top 15 in national volume for TPOs and top 5 for [marketing] strategy.”

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Nolan went on to praise the company for their rapid expansion: “We are really impressed with the growth and impact resulting from [the] reverse mortgage marketing strategy…Combining effective marketing followed by a professionally staffed team of loan advisors is not new, but exceptional execution is rare. Additionally, your processing and production teams are among our best executors we work with. Your team generates loan pull through that we don’t often see.”

Mr. Knock also outlined his vision for the future, noting that “We’re very proud of our accomplishments and now we’ve proven that we’re a force in the industry. We’re projecting strong continued growth using our existing strategies and we’re currently expanding into other areas of market share.”

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Similarly, Planet Home Lending, LLC, a national residential mortgage lender, has opened its first retail-lending branch in Denver, Colorado. The branch will serve the needs of individuals in the area looking to buy or refinance a home. It will be managed by mortgage industry veterans Derrick Strauss (NMLS ID#294753) and Wes Tool (NMLS ID#24210). The two have nearly 40 years of combined mortgage experience.

“I expect the Denver community will be very pleased to have access to Planet Home Lending, as the company offers the loans homeowners here need,” Strauss said. “Planet Home Lending offers everything from low down-payment FHA and USDA mortgages for first-time homebuyers right up to million-dollar home loans with no mortgage insurance for move-up buyers. We also have a lot of experience working with armed services members who want to take advantage of their VA home loan benefits.”

Planet Home Lending offers competitive rates and fees on home loans to borrowers who fall outside the standard credit box. “We now have home loans and refinance loans for self-employed people, business owners, retirees, real estate investors, and those who’ve suffered bankruptcy or foreclosure,” Tool said.

“Strauss and Tool are the perfect industry experts to manage Planet Home Lending’s expansion into Denver,” said Mike Lee, Planet Home Lending’s senior vice president of national production. “They’re a dynamic team known for delivering value to homeowners.”

The Denver branch will also include loan officers Daniel Brennan (NMLS #558900), Fabbiana Progar (NMLS ID#1611684), and Joshua Saenz (NMLS ID#1518029), aided by loan officer assistants Darlene Zbanek (NMLS ID#695674) and Jaren Thomas (NMLS ID#518500).

Founded in 2007, Planet Home Lending is a privately held, national residential mortgage lender with multiple business channels uniquely positioned to provide competitive products and services. The company is an approved originator and servicer for FHA, VA, and USDA as well as a Freddie Mac and Fannie Mae Seller/Servicer, and a full Ginnie Mae Issuer and approved sub-servicer.

Smart lenders aren’t just seeing record growth and adding new branches, they are also adding whole new business lines. For example, LD Holdings Group, LLC, parent company of loanDepot, the nation’s second largest non-bank consumer lender, has continued its expansion beyond its profitable mortgage and personal loan businesses. In Q1, a newly formed venture, mello Home, will connect pre-approved homebuyers with verified real estate agents in their local market, and help consumers find and hire home improvement and other pros.

“We first created the mello brand as a name for our proprietary technology platform which redefines fintech from simply streamlining the loan process to a blended digital/local relationship covering all aspects of consumer lending and homeownership,” said Anthony Hsieh, Founder and CEO of loanDepot. “Now we are expanding the mello brand.”

When launched, mello enabled three foundational strategies: (1) consumers can run any mortgage or nonmortgage loan from application through funding from any device on their own or alongside local loan consultants who can advise and co-pilot throughout the process, (2) loan consultants licensed in all 50 states can seamlessly respond and advise in real time to the millions of consumers the company sources digitally, and (3) analytics on customers’ evolving needs throughout their home buying and owning lifecycle.

This new launch of mello Home builds on this foundation by adding local real estate agents nationwide to the platform. Consumers have come to trust and expect single brands for most of their needs in areas like retail, and the mello brand will meet the same consumer expectation1 for most of their needs in housing.

“As America’s digital marketing leader in the homeownership space, we spend hundreds of millions of dollars to connect with homebuying consumers each year, and increasingly, these home shoppers are not yet working with a real estate agent,” said Hsieh. “mello Home unleashes our digital marketing power to real estate agents by connecting them with homebuyers who’ve been pre-approved by loanDepot’s local loan consultants and are ready to shop and close with a local real estate agent.”

mello Home’s service is free for consumers, and helps real estate agents grow business more efficiently. Typically agents buy home purchase leads up front and spend months working with customers who might never buy a home with them. mello Home gives agents ready-to-transact customers who’ve received credit and digital underwriting pre-approvals from experienced local loanDepot loan consultants, and have requested to be connected with a local real estate agent to start the process of purchasing a home. Agents pay no up-front fees to join the mello Home network or to be connected with ready-to-transact clients, and they agree to a pay a fee to mello Home on closed transactions.

“Because all real estate is local, not all housing disruption is digital,” said Hsieh. “It’s about matching home buyers and owners with trusted local pros and relevant services throughout their homeownership journey. mello’s proprietary technology and local teams serve the trend2 of Americans researching real estate services online and closing with local pros.”

As this digital/local trend matures in housing, the company will launch new mello businesses.

Later this year, the company will launch a home improvement business to meet increasing demand3 for home repairs and upgrades.

The mello home improvement business will serve two primary functions: (1) immediate approval of home improvement loans up to $75,000 and seamless introduction to verified contractors, and (2) contractors can use mello technology and proprietary digital underwriting to offer financing at their point of sale, so when they propose a project to a homeowner, they can offer financing in real time.

For homeowners, mello lets them begin with a contractor first or financing first, then finish home improvements fast. For contractors, mello gives them point-of-sale financing and brings them more project-ready customers who’ve been pre-approved by loanDepot loan officers.

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The Power Of 1 In Vendor Management

The web of compliance continues to broaden and becomes more complex with each passing year. The Ability-to-Repay Rule and Quality Mortgage Standards now require lenders to work with “reasonable, reliable” third-party vendors to verify consumer information. Not only that, lenders are actually responsible for them. On top of thoroughly vetting each vendor, you must also continually monitor them to ensure they are updating procedures as required. Vendor management has become a significant part of what lenders do each day, and as such, demands a great deal of time and effort. As a result, a real trend is emerging within the industry to consolidate vendors.

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The proper way to vet

There’s much more to choosing the right third-party vendor than merely reviewing the documents and data they provide. You need to make sure that they align well with your lending operation, are in full compliance with all applicable regulations, will be available to address your questions and concerns, and are equipped to handle emergencies after hours should they arise…

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To do this properly, you must carefully review:

>>That their technology has been certified by a third-party IT-security specialist.

Manmade and natural disaster recovery plans for events such as hurricanes, floods, earthquakes, strikes, sabotage, hacks and theft.

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>>The vendor’s history, overall financial health, and organization setup.

>>The vendor’s compliance with applicable regulations. You should also learn whether they are under the supervision of any regulatory body.

If all of this sounds like a lot of work, it is. And as we all know, good work takes time, and time equals money. This is at the core of why there has been steady movement toward vendor consolidation.

Less is more

More and more, lenders are moving toward using as few third-party vendors as possible. To do this, they seek out firms that offer multiple products and services that can be bundled – essentially all verifications from pre-funding to post-closing, including appraisals, credit reports, flood zone determinations, Undisclosed Debt Verifications, tax return verifications, employment and income verifications, and Social Security Number verifications.

By using fewer vendors that offer more data services, those responsible for vendor management within your organization will have fewer companies to vet and manage and less paperwork to contend with. Time savings is where the real value is. Ideally, you should move toward using one third-party vendor, not only because of the reduced amount of time needed for the proper vetting and management of a single firm, but because there are many other benefits to using one third-party vendor.

>>Assistance with compliance – Reducing risk and ensuring compliance is better accomplished if you partner with a third-party vendor that understands and is fully capable of complying with applicable regulations.

>>Efficiency – Streamlining your business dealings by working with one third-party vendor for multiple solutions simplifies and focuses the work that goes into vendor vetting and management. Efficiencies are realized in both time and money saved.

>>Better customer service/business continuity – Dealing with one customer service group for multiple products is infinitely easier than dealing with multiple customer service groups from different vendors. You receive undivided attention from one point of contact that is dedicated to meeting your business needs.

>>Greater ability to customize – Selecting only the document and data solutions that are uniquely suited for your lending operations can be done more easily if you are picking and choosing products and services from a single source with a comprehensive line.

>>Best-in-class solutions – Building an end-to-end process with the very best solutions out there is the job of third-party vendors whose aim is to be a single source. By choosing to partner with one of them, you’ll immediately benefit from having access to best-in-class verifications.

>>Cost-savings – Reducing costs is another important reason to consolidate vendors because of the economic lift realized by bundling products and services. At the same time, the man hours saved by having to perform due diligence on a single vendor translates to dollars saved as well.

What characteristics to look for, and avoid, when assessing a third-party vendor

To realize all of these benefits, you must identify a third-party vendor that’s a good fit for your organization. What should you look for? Rich Swerbinsky, Chief Operating Officer of The Mortgage Collaborative, the only independent cooperative network in the mortgage industry, has an interesting perspective.

“There’s no better way to gain insight as to the likely experience with a vendor than to speak with customers that are already doing business with them,” Swerbinsky said. “Lenders should also look closely at the experience and track record of the senior leadership team as they are the people driving the organization. In addition, it is important to evaluate what key systems they are using and how well they can be integrated into your lending business,” he added.

At the same time, there are things lenders should be concerned about when vetting a vendor. What are those read flags? Swerbinsky cites a number of them.

“You should think twice about any vendors not already integrated or working to get integrated with key industry platforms. Vendors that insist on long-term initial contracts is another red-flag to me as vendors who will allow year-to-year contracts are essentially betting on themselves. Also, there are many start-up tech vendors in the mortgage space right now. Lenders should ask how they’re funded, how many existing clients they have, what their one-, three-, and five-year plan is for the company, and pay even closer attention to the depth of experience on their senior leadership team,” Swerbinsky said.

One is a powerful number

Once you have identified a third-party vendor that aligns well with your lending organization, you can begin the process of consolidating your verifications with them. Once that is accomplished, you will begin to reap the benefits in terms of time and effort saved in the areas of vendor monitoring and management.

The power in partnering with one third-party vendor is considerable. It affords lenders the opportunity to save precious time and money, while benefiting from access to the very best verification data services available, better business continuity, improved customer service and the ability to tailor verification services to meet the specific needs of their business. More importantly, by choosing to work with a vendor that is well-versed in applicable regulatory requirements, lenders are better positioned to reduce risk. Vendor consolidation has become a popular business practice within the industry for good reason. There is much to be gained by harnessing the power of one.

About The Author

Get Engagement

How do you win in the current mortgage market? You have to get your client and prospects engaged. How do you do that? Good content is one way.

In the article “These Master Copywriters Share How to Go From Being a Good Copywriter to a Great Consultant” written by Margo Aaron, she shares some tips. She first reports that The Copywriter Club is resurrecting the lost art of engagement by cultivating community online and off. Here’s how they’re doing it:

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Recently, Kira Hug and Rob Marsh have managed to do the impossible. They resurrected the lost art of engaged Facebook groups, launched a successful podcast, and cultivated a community of over seven thousand copywriters launching and growing businesses.

The Copywriter Club, or TCC as they’re known by insiders, has quickly grown into one of the most engaged communities of direct response copywriters on the Internet.

Recently, 75 of them gathered in a small room at Hotel 50 Bowery in Chinatown where they kicked off the first annual TCC IRL Event. The who’s-who of the copy world showed up to support the event, share copy secrets, and swap war stories on how to create copywriting success.

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Against their better judgment, Kira and Rob let some take a peek behind the curtain at what they created and share what was learned with you fine folks. Here’s what you missed at the TCC event in Manhattan.

For decades, copywriters have claimed you can find success by being the “hired gun” that jumps from client to client, beats the control, and collects royalties from her chateau in France. Turns out, that model doesn’t work anymore.

Speakers joked that a control barely lasts 14 minutes nowadays, where it used to last months. Today, it’s about being the entrepreneur, advisor, and expert inside of a client’s business, as much as it is about copy that converts.

Brian Kurtz, a “titan” of direct response, drove that point home when he reminded the crowd of the 40/40/20 rule. Forty percent of your success comes from your list, 40% comes from your offer, and 20% comes from your copy. Which is a particularly bold rule to underscore at a copy event.

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“Go to a list of people who REALLY want your offer with [expletive] copy and I bet you make a sale.” Mmmmhmm. The man knows a thing or two about sales.

There were also honest conversations about whether JV partnerships are worth it, when to raise your rates, why “not segmenting” is the biggest mistake you can make, what to do about lapsed list engagement, and lots of other nerdy fun DR copy things. Like these:

>>Copyhackers founder Joanna Wiebe reminded the crowd that “our job is to make them decide” after hitting us with the sobering statistic that 60% of sales are lost to apathy and indecision.

>>Talking Shrimp founder, Laura Belgray, warned attendees of the dangers of being the “drunk uncle” – the guy who shows up out-of-the-blue and asks for money.

>>Copy and content maven Hillary Weiss taught attendees why personal branding actually matters and has palpable business consequences. “Your business is what you do. Your branding is how you differentiate yourself from everyone else.”

>>Abbey Woodcock, copy and conversion whisperer proved that nailing a client’s “voice” is not a unicorn quality like I’ve always thought. Apparently, anyone can do it (and she showed attendees how).

>>Copy juggernaut Parris Lampropoulos took attendees back to the basics when he explained, “practice makes permanent, not perfect.” And advocated for a community or mentors who could provide feedback, course correction, and critiquing (the good kind. Not the fluffy kind).

While the content was solid, the best part of the conference was what happened between and after the presentations: The community.

The event brought together an incredible blend of beginners and masters bonded by their mutual affection for this obscure industry they’ve all arrived at by accident. The connections made and opportunities created at this event mirrored what Kira and Rob have successfully created online (only, it was IRL).

They curated dinners, encouraged joint lunches, and facilitated introductions that will no doubt launch careers, expand businesses, and foster a community of quality direct response copywriters for decades to come.

So, what’s the takeaway for the mortgage industry? You have to network in a meaningful way online and offline. Our industry loves LinkedIn. In fact, it’s where most Fortune 500 decision-makers and executives like to spend their spare time. The best part?

More often than not, they’re actually scrolling through actively looking for valuable content to read. There isn’t the same barrier you need to break down like on other social platforms like Facebook. They’re not there to find Buzzfeed quizzes, wedding photos, or memes. They’re looking for content that can change the way they do business, which is most definitely music to the ears of a B2B marketer.

According to Business Insider Intelligence, TechCrunch and Fortune, LinkedIn has officially crossed the half-billion user mark back in 2017. Since they were founded in 2002, they’ve continued to grow their user base year after year.

LinkedIn’s monthly active user based reached 260 million back in March 2017. That’s almost 2.5x the 106 million monthly active users last reported in 2016. This number comes from research conducted by web usage company Apptopia and has not been confirmed by LinkedIn.

Of those using the platform monthly, up to 40% are accessing it on a daily basis. If that is the case, that’s over 100 million professionals you could be targeting every single day. To make that even more excited, LinkedIn users typically use the platform to find relevant content, meaning they’ll be much more willing to check out what you’re sharing.

From a B2B perspective, the decision-makers you’re trying to reach are using LinkedIn. If you double down on your LinkedIn efforts, you’ll be able to target the right people in the place they like to spend their scrolling time.

Also, Mobile is booming and LinkedIn’s mobile user numbers reflect that. Their mobile user count is climbing every month, which only makes it easier to reach the people you’re trying to reach. Mobile makes it easier for a user to just open the app and scroll through, giving you more opportunities to reach them.

The big takeaway is that mortgage companies should utilize the services of experts to help them better engage clients and prospects, which for our industry in particular, should include a solid LinkedIn strategy.

About The Author

Building A Better Conference

This is going to sound very “California.” We set an intention when we created NEXT. That was ultimately what has differentiated NEXT from any other mortgage conference. NEXT is the mortgage industry’s only tech-centric conference designed specifically for women executives. Our intention was an event that provided intel that would benefit drivers of business outcomes, while accounting for the comfort that accomplished women executives have come to expect. A place where women’s sensibilities weren’t just considered, but were focused on; a place where attendees would receive information appropriate for the decision makers and executives that they were — the tech-loving executives they were, to be exact.

Our first event, held in January in Dallas, attracted nearly 200 women from leading mortgage lenders, the GSEs, technology providers and service providers. More than 30 of the nation’s largest mortgage lenders were represented, 89% of attendees held a title of VP or higher, and the total attendance was comprised of 84% women. True to our intention of attracting tech-loving executives, attendee titles included the likes of COO, CTO, Technology SVPs — the roster was heavy with decision makers whose titles clearly indicated that they vet technology for use in mortgage lending operations. NEXT is open to any woman executive in mortgage lending. You don’t have to be a member of a certain association or user of a certain technology.

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We received an unexpectedly large amount of positive feedback from attendees, exhibitors, sponsors — even our college intern. One of our attendees literally got teary-eyed when thanking us for putting on the event. A sponsor said her company received “more love” from NEXT than it has at conferences where they’ve spent literally 10 times the amount they spent at our event. During the week that followed the event, we received messages from attendees who were practically pleading with us to continue hosting events.

The question is, why? Both my co-founder and I have attended dozens of mortgage conferences, and we’ve spoken with dozens of people about dozens of mortgage conferences. In comparison, we received an inordinate amount of positive feedback. Quite frankly, the amount of positive feedback we received eclipsed anything we’ve ever encountered. The reason is intention.

Let’s go back to our original intention: providing intel that would benefit drivers of business outcomes, while accounting for the comfort that accomplished women executives have come to expect. That meant we’d need to not only provide quality content, but also create an environment that promoted networking and the exchange of information among attendees. As most of us know and as many studies have indicated, the quality of an executive’s network is crucial to success. A lot of intel comes from peers, whether through brainstorming and direct questions and answers, or through the grapevine — discussions on who’s doing what.

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Fulfilling the first part of our intention was pretty straightforward. We searched — and sourced — content that provided the latest tech intel, and put together hard-hitting panels on how successful lenders are deploying technology to compete in today’s market. One of our most popular panels was Technology and the Borrower Experience, which was moderated by Crystal Sumner, Head of Legal at Blend. Joining Crystal were panelists Cerita Battles, SVP & Head of Retail Diverse Segments at Wells Fargo Home Mortgage, Julie Lane, SVP Digital Strategy & Marketing at Freedom Mortgage and Charity Moreland, National Builder Sales Manager at Homeowners Financial Group.

Another hugely popular panel was the highly anticipated Inside Quicken Loans: Secrets to Driving IT Innovation. This panel included executives Jennifer Sun, VP, Data Operations, Stacey Caster, VP, Technology Communications, Maggie Hubble, Director, Data Governance, and Jolie Behrns-Vitale, Business Intelligence at Quicken Loans. Sarah Wheeler, magazine editor at HousingWire, moderated.

We got a lot of compliments on many sessions, but these two were clear frontrunners.

NEXT’s technology showcase demonstrations were another great source of intel. Attendees got to learn about new mortgage technology that included eClosing solutions, borrower mobile applications, client relationship technologies, construction loan management and more. We limited the number of tech demos to just 15. Prior to hosting NEXT, we’d spoken with lenders who found it difficult to remember or pay attention to a barrage of tech demos.

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As for an environment that fostered effective, connected networking, that wasn’t quite so straightforward. As it turns out, our content played a big role in creating that environment. Here’s how. At conferences, attendees often discuss content. It’s a great way to break the ice with a stranger. NEXT focuses on technology and as it turns out, tech is a great equalizer.

One of the media representatives who attended the conference said he was at a dinner where, out of the eight people at the table, no one knew any of the others prior to the conference. He made a point of saying how unique it is to have strangers feel comfortable enough to go to dinner together. Being connected through the conference was enough to bring them all together.
It turns out that even on day one, women were making authentic connections. One of our tech demo moderators told us that during breakfast, prior to the first day’s sessions, she and another lending executive had a meaningful discussion about a business challenge. Our moderator walked away with a lot of insight into an approach and solution — not to mention the fact that she got the relief that comes from relating with a peer over a common challenge.

We wanted to do something special for our main cocktail party, so we partnered with Girls Inc. of Metropolitan Dallas and turned the cocktail party into an interactive charity activity we called “Prepping our NEXT Leaders,” where attendees built gift bags of school supplies for Girls Incorporated of Metropolitan Dallas. Again, we got amazing feedback about the event, which makes sense. Over 65% of our attendees, both lenders and non-lenders, were director level of higher, who had just spent the day investing in themselves. Giving back was a natural way to round out their experience. Both lenders and non-lenders participated. Some of our sponsors, namely Pavaso, Loan Scorecard, SimpleNexus, WeGoLook, Docutech and BombBomb, got involved by making donations to offset the costs of the supplies. All proceeds were donated to Girls Inc. of Metropolitan Dallas on their behalf.

Attendees also came together virtually. Most attendees installed our conference mobile app, and started using it to set up meetings, trade contact information and share photos. There were 446 messages exchanged in the app and more than 1,500 views on attendee profiles — not bad for just under 200 attendees.

One of NEXT’s goals was to provide deserving executives with greater visibility and recognition. We hosted media outlets that included Progress in Lending, HousingWire, Lykken on Lending and Mortgage Cadence’s LendTech video series, all of whom reported live from the event.

We also hosted two conference contests, and more than 70% of attendees participated by voting. They chose Notarize as NEXT’s Best in Show Tech Demo, and also selected the NEXT Who’s Who, which recognizes NEXT conference attendees who are demonstrating leadership in the mortgage industry.

The NEXT Who’s Who is a bit different from other industry awards. First, winners are selected by peers, rather than a panel of judges, based on factors like their knowledge, insight, presence, communication, experience and commitment to the industry. Second, The NEXT Who’s Who does not call for official nominations, so there is no marketing or PR to sway voters. And finally, any NEXT attendee is eligible, regardless of age, time in industry, position or other factors.
Our first place winner was Cerita Battles, senior vice president and head of retail diverse segments at Wells Fargo Home Mortgage. Cerita was a featured speaker on “Technology and the Borrower Experience,” a session that was presented on Thursday, January 18, 2018, the first day of the conference.

While the list was created to name three professionals, second place involved a three-way tie between Julie Lane, SVP Digital Strategy and Marketing at Freedom Mortgage; Crystal Sumner, Head of Legal at Blend; and Jennifer Parker, General Manager of Digital Mortgage Solutions at Notarize. Lane and Sumner participated on the “Technology and the Borrower Experience” session. Parker presented for Best in Show demo winner, Notarize.

The next NEXT is scheduled for June 21st and 22nd in Dallas at Hotel ZaZa, which is nestled in the city’s fashionable Uptown neighborhood. We selected ZaZa because we feel it provides the boutique hotel experience and perks our attendees appreciate — at least, that’s what their feedback indicates.

We intend to keep NEXT small because we want to maintain that personal, friendly and open vibe that our attendees haven’t been able to find anywhere else. Based on what we’re hearing, we think the days of mortgage conferences that provide quantity over quality are going to diminish over the coming years. Just about all of the feedback we received — from lenders, GSEs, and tech and service providers — indicated that fewer attendees allowed for better connections and higher quality networking.
In fact, one of our sponsors said that “NEXT’s small and intimate size allowed us to to speak to just about every attendee,” and that they’d gotten “just as many leads—if not more” as they’d gotten from bigger shows.

We’re really proud that we’ve been able to provide women executives with an event that provides quality intel and networking opportunities. It’s exactly what we intended. For information on registering for the next NEXT, simply go to www.nextmortgageconference.com.

About The Author

Time To Close A Loan Decreased

According to data from Ellie Mae, time to close all loans decreased from 44 days in January to 42 days in February.

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Time to close all purchase loans decreased from 47 days in January to 45 in February and time to close all refinances dropped from 40 days in January to 37 days in February. This is a significant drop from 2017 data that shows time to close all refinances was 47 days. Time to close FHA loans also decreased from 47 days in January to 43 days in February and time to close a conventional loan shrank from 43 days in January to 41 days in February. Time to close VA loans shrank from 50 days in January to 47 days in February. This comes as 30-year interest rates continue to rise from 4.330 in January to 4.480 in February, the highest rate since May of 2014. The percentage of closed ARMs held at 5.5 percent for the second month.

Closing rates decreased slightly with closing rates on all loans decreasing from 70.9 percent to 70.6 percent and closing rates on refinances decreasing from 65.5 percent to 65.0 percent. Closing rates on purchases held at 75.7 percent for the second month.

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“As expected, we are seeing the percentage of refinances taper back off to the projected industry levels,” said Jonathan Corr, president and CEO of Ellie Mae. “And with interest rates on the rise, we’re seeing the purchase market begin to gain some momentum. We know that the shift to a purchase market will drive the shortened time to close and we will watch to see if the trend continues into the spring and summer months.”

Other statistics of note in February included:

>>The percentage of refinances dropped from 45 percent of all closed loans in January to 43 percent of all closed loans in February.

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>>The percentage of purchases increased to 57 percent of total closed loans.

>>The breakdown of type of loans remained the same for the second month with FHA loans representing 19 percent of closed loans, conventional loans representing 67 percent and VA loans representing 10 percent.

>>Overall FICO scores held steady at 721 for the second month. LTV increased from 77 to 78 and DTI held at 26/40.

The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans that closed three and six months earlier. The closing rate is calculated on a 90-day cycle rather than on a monthly basis because most loan applications typically take one-and-a-half to two months from application to closing. Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification. The Origination Insight Report details aggregated anonymized data pulled from Ellie Mae’s Encompass

The Educated Customer

Companies across America spend billions of dollars a year to gain an edge to separate themselves from the pack. This includes creating marketing campaigns driven by seasonality, monitoring forecasted changes in trends and using information from data research to remain competitive. In a time where data and social media rule, now more than ever, we must be vigilant with the public’s perception of our brand and company. Reviewing the Consumer Complaint Database, managed by the Consumer Financial Protection Bureau (CFPB), can provide a company with insights into what is important. Companies that review this database periodically, make adjustments, and take the time to educate consumers will have the upper hand on competition and possibly reduce any complaints.

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The database tracks and monitors consumer complaints related to banks, lenders and other financial institutions to ensure fair treatment for all consumers. Complaints logged at https://www.consumerfinance.gov/complaint/ are reviewed and routed to the financial institutions on consumers’ behalf. Companies are given time to work with the consumer and respond to the complaint (often within 15 days). The final step of the process is to publish complaint-related information to the database giving the customer an opportunity to provide feedback, if desired.

These complaints yield valuable insights into consumer behavior and their understanding of our industry’s products and services. Even if a company does not receive multiple complaints, there are still lessons within the data. Here are a couple of examples:

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FACT: 93 percent of all mortgage-related consumer complaints are NOT resolved in favor of the customer.

INSIGHT: The consumer may perceive the lender in a negative light despite not doing anything wrong, un-ethical or with malice.

FACT: Upwards of 90 percent of the complaints are closed with an explanation.

INSIGHT: Improved communication between lenders and customers may lead to a better understanding of mortgage products and services, which in turn will lower the number of complaints considerably.

Tech companies often speak of usability and user experience, especially when referring to websites and apps. When a user tells you they struggled to navigate your site or struggled to find the one thing that took them to your site in the first place, it is important to listen and to see if there is a theme. If someone does not understand what you do, what you sell or why you do it, they often will not buy from you. In fact, you risk losing the customer permanently.

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There is a lesson that mortgage companies can learn from this information that can help them improve their business practices. Escrow accounts, property taxes and mortgages are not simple and are not easily understood by most consumers. With complex federal, state, county and city specific regulations undermining the ability to understand exactly how property taxes are calculated, it is understandable why consumers are confused. Consumer confusion and consumer perception may well be the same thing. If they are confused or frustrated with your product and/or services, their perception of the company will no doubt be negatively affected.

In the beginning of the second quarter of 2017, the CFPB expanded the number of issues tracked from six to 18 under the mortgage product type within the complaints database. With this increased delineation of issues, we will have the ability to see more accurate trends within the industry.

At the beginning of the fourth quarter of 2017, the leading mortgage complaints were payment processing issues, struggles to pay mortgage/loan servicing and escrow account issues. These collectively account for 66 percent of all mortgage-related complaints in 2017.

Though credit reporting and debt collection complaints have soared to the top of the list in 2017, mortgage related complaints still represent a large portion of all complaints logged in 2017.

Effectively addressing the concerns of consumers and educating them on mortgage related issues is no longer an option. It can mean the difference between an educated consumer and a host of consumer complaints.

About The Author

Changing Corporate Culture

Companies that train their employees in what are commonly referred to as “soft skills” are finding those efforts pay off in productivity and retention.

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People with soft skills are adept in areas such as interpersonal communication, leadership, problem solving and adaptability. But often still missing in the soft-skills department, some corporate analysts say, is the willingness to show an even softer side – specifically, saying “thank you” and “I’m sorry.”

Simple as they sound, those phrases – which most of us were taught by our parents as good manners – are often difficult for many people in the corporate culture to say. But there’s a great value and power to saying ‘I’m sorry’ and ‘thank you’ in the corporate world. The first time someone apologizes or says a genuine ‘thank you,’ the whole environment shifts.”

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I have observed corporate cultures becoming healthier when workers and leaders learn more about each other, care about each other and communicate better. As a result they work better together.

So many people in today’s corporate culture have lived through not being valued in the workplace. As we moved from the industrial age to technology, the thing that got left behind was the human element. People are starving for the human touch.

I offer up three reasons why saying ‘thank you’ and ‘I’m sorry’ carry power in the corporate culture:

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It rebuilds relationships. Leaders who can put themselves in the shoes of an employee whom they berated can build strong bridges throughout the company by apologizing and showing a more respectful approach next time. People feel more valued and no longer threatened. Every word you speak is an act of leadership as you influence others. A thank you to a deserving employee also forges a more trusting, respectful relationship. Being specific and genuine with the thank you heightens a person’s self-image, their view of the workplace, their boss and co-worker, and motivates them to keep up the good work.

It shows character. Humility shown in saying “I’m sorry” is essential to leadership, as well as to the rank-and-file, because it authenticates a person’s humanity. Saying “thank you,” reflects an appreciation for others that is essential in building a successful team. Competence is no substitute for character. When people see a co-worker or boss doesn’t thoughtlessly put themselves above them, bonds and productivity grow. Character is a key element that attracts people and builds the foundation of a company.

It energizes everyone. It’s easy to get wrapped up in daily business obstacles or an overloaded email box and skip saying “sorry” or “thank you.” But when these new habits are formed, showing that everyone values everyone else, a spirit of cooperation flows like a river throughout the company, creating a consistently positive culture Martino says.

The relationship qualities, founded on mutual respect, that were common 100 years ago are still essential today and without them organizations fail. Walls go up, people get alienated and can’t work together anymore.

About The Author

We’re At A Pivotal Moment

After nearly a decade of deliberate downward trends, interest rates are now put on an upward trajectory, with 30-year fixed now at a 4-year high. A decade long housing recovery is now putting many markets in an affordability crisis, one in which wage growth, even in this healthy economy, cannot keep pace with home price growth. Amid record-breaking report after report of high home prices, we have declining trends in home sales volume, indicating that while those who are willing to pay the possibly overvalued prices push up the median home price figures, those who are not stay on the sidelines and bring down closing volume.

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The Fed is planning another three to four rate hikes this year. Median home prices are now in the 20 to 30 percent above pre-bubble peak of the last housing correction in many top markets. Bubble talks are getting more rampant, including by renowned money manager James Stack, who predicted the last one.

We’re no doubt in a pivotal moment in housing. Are you watching it erupt in slow motion, or are you doing something about it?

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So far, many of your peers seem to be taking the do-nothing route and carrying on business as usual, except for the part of likely making less money. As fewer Americans buy homes, and among the ones who do get more self-reliant and shop for the lowest points and rates, mortgage lenders’ profit margins have continued to narrow. As Wolf Richter, CEO of Wolf Street Corp., puts it: The mortgage industry is going through all kinds of headaches.

But there is a quiet revolution brewing. Recently, a mortgage leader in the western region that focuses on many scorching-hot markets, such as Seattle, Portland and Las Vegas, began offering mortgages with down payment protection. The new offering is positioned as ”mortgage plus,” a better and smarter loan for more informed and savvier homebuyers. With a mortgage including down payment protection, loan officers and realtors now have a solution for cold-feet buyers who worry about buying at what could likely be the top of a typically seven to 10 year real estate value fluctuation cycle. Even if these buyers are buying high, if they sell later at a loss after an expected correction, their loss in their down payment is reimbursed *. Refinance borrowers have a similar option, in equity protection. They can essentially lock in the appraised value of the home at market high when they refinance, when they sell later at a loss after a downturn, their loss in equity can be reimbursed. Pacific Union Financial and First Heritage Mortgage – also operating in states with overheated home prices – are among other proactive lenders offering the same new“mortgage plus” products.

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Notice that mostly non-bank lenders are taking the bull by the horns (pun not intended) to carve a new point of differentiation for themselves and a new profit revenue stream. This is perhaps one of the few bright spots in the mortgage industry which is struggling with negative perceptions and downward profit trends. Big-bank lenders’ market shares and margins have continued to decline, while more nimble non-bank lenders are taking the lion share of the mortgage market. It is not a surprise that these lenders represent the only growing segment.

A healthy economy has also propelled a record-breaking stock market, on a parallel ascent so far with the housing market. Earlier this week, Goldman Sachs warned there is a “high probability” a stock market correction will happen in the coming months. Goldman Sachs and other oracles of the housing bubble may be crafty with their timing; after all, it’s safe to call for a correction in almost anything after a long bull run. Even if they were all wrong, as their bubble alarms get louder, now is the time to consider what consumers will do and most importantly, what will you do in order to survive the next downturn.

About The Author