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Redefining Online Mortgage Experiences

The mortgage industry continues to be faced with constantly changing rules and regulations, rate fluctuations, CFPB enforcements, election fall out and rapidly changing borrower expectations. More specifically, today’s borrowers expect a simple yet dynamic online lending experience. This put intense pressure on the over 7,000 mortgage lenders and millions of real estate agents trying to meet these new demands.

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Due to these changing demands and expectations from borrowers, there is a significant need for lenders to redefine what on online mortgage and real estate experience should be. Seventy-seven million millennials make up about one-fourth of the US population. Millennials in the US wield about $1.3 trillion in annual buying power, 85% of them are using smartphones as their daily technology device, and 49% are seeking to buy their first home. Millennials are becoming a significant force in the mortgage industry.

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Millennials demand mobile responsive lending sites and web applications that have a responsive layout from their potential lender. This digital revolution has led to about 90% of consumers beginning their search for home mortgages using digital technology and online lending tools. The online application process has proven to create a better consumer experience through automation, convenience, and efficiency.

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Borrowers are looking for simplified versions of everything: text rather than calling, or shopping online rather than going to the store. The mortgage industry is no exception to this habit.

With online lending, the industry is making a digital transformation by taking the borrower into a world of digitized processing at all stages of the loan lifecycle. At the end of the day one thing that is consistent is that more and more borrowers are looking for the digital mortgage experience. With innovation and digitization, borrowers look to complete the 1003 application digitally in less than 10 minutes with greater speed and accuracy.

This type of Innovation doesn’t only improve the consumer experience, it also has major bottom-line benefits to Mortgage companies. The digital experience increases the amount of money flowing into mortgage companies.

Today’s digital experience must provide borrowers with a compliant, aesthetically appealing, and user-friendly web solution that includes key program integrations. With the right solution borrowers immediately gain access to a network of Realtors and Mortgage professionals that can offer a swift online purchasing process. The key aspects that make this experience possible are:

>> Integrations with mortgage critical third-party programs and well documented application program interface (API), which allows for a variety of software components to interact effortlessly. This enviably simplifies and accelerates the borrower process and user experience.

>> A digital graphical prequalification application and 1003 application that streamlines mortgage processes including both the point of sale stage and loan origination.

>> A content management system that accomplishes compliance from the corporate level down. The system is controlled from one centralized location to eliminate reputational risk and any violations of compliance standards.

>> Lead generation and referral partner relationship building tools with the ability to provide affinity websites for mortgage partners such as accountants, charitable organizations, large employer, Realtor sites, and more. These websites have mortgage sponsored banner ads and/or applications in place.

>> State-of-the-art technology that considerably reduces the application abandonment rate by catering to the borrowers needs and overall experience.

>> A customer portal, which allows the loan officers to keep all parties, associated with the loan process up to date with the status of the application. Parties included on this are the borrower, title company, co-borrower, and realtor.

Over 75,000 individuals in the mortgage industry are benefiting from this innovative technology solution that delivers a user-friendly, compliant, secure, effective solution that enhances the digital mortgage experience.

WebMax’s digital experience expedites the borrowing process, helps maintain compliance, delivers dynamic online lending tools, and provides a highly innovative borrower experience. If you are attending the MBA Technology Conference in Chicago contact us to schedule a time to meet at 856-702-6400 or visit our website at www.webmaxco.com.

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Online Borrower Collaboration Best Practices

Borrowers are frequently turning to the Internet to research, shop and apply for their home loan.  As customers become more sophisticated, their expectations are rising on what tools should be available to streamline status updates or communicate with their Lender.  Simultaneously, Lenders need to reduce costs and streamline operations with their workflow. The answer is offering a Borrower Portal.

Online collaboration should be viewed as a “Required alternative” and not necessarily a designated process. There are and will continue to be those applicants who want to meet face to face; however, “the times they are a-changin”. When implemented properly, the right process makes a lender’s job easier and improves your service levels.

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So what is important and how do you get there? The following is a list of seven objectives lenders should consider as they develop or refine their online borrower portal initiatives:

Messaging / Status updates – The first requirement of an effective portal is to ensure the lender’s staff is not required to do more work to support loan updates. For a gain in productivity the portal should automatically identify and alert applicants based on LOS updates when key milestones have been met such as loan approval, appraisal received or time to schedule closing.

Staying compliant with the consent process – Lenders need to track when applicants opt in, opt out and consent for each individual applicant. To remain compliant, applicants should not see other applicants’ sensitive date and be provided with individual disclosure delivery for loans with a rescission.

Applicant authentication – Lender’s need to validate that logged in applicants are in fact, who they say they are. To accomplish this your solution should complete “out of wallet” identity verification to provide “challenge” questions from public records and or credit reporting that ensure compliance.

Disclosure delivery / e-Signing – The timing and cost of managing upfront disclosures, redisclosure of Loan Estimate’s, locks, appraisal, MI changes, flood and closing disclosures is crucial. An effective online portal will ensure each applicant gets a timely delivery of disclosures and provides an integrated log within the LOS system.

Pricing / Locking – Giving an applicant the opportunity to check pricing and lock when authorized requires integrated rate sheets and or pricing engine functionality. Your portal strategy needs to be configurable to ensure loan status, specific conditions and or time of day are properly managed.

Loan Conditions – Real time loan conditions can start with the application and be managed through to loan approval. Borrowers should be able to easily understand what is needed and have a simple solution to upload conditions directly to the lenders paperless work queue.

Mobile Friendly and Real Time Alerts – The Lender’s staff should be aware of incoming messages and loan documents with proactive alerts. The LOS needs to be configured to manage a queue for each user that identifies incoming alerts, when conditions are uploaded and need review, and the status of disclosures delivered online. This process should be available on smart phones, tablets and various web browser tools.

How can you get there? While there is no shortcut in implementing, Lenders with an interest in streamlining processes online should consider the efforts of developing a solution internally or working with a vendor who specializes in the tools they need. Consider what is necessary for a long-term fully integrated solution. How will your vendors such as disclosure/closing documents or pricing engine be supported? Does their road map ensure you have a long-term partner? The right strategy allows a lender to grow into a solution as the consumer direct channel evolves.

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There’s A Disruption In The Force

In today’s business climate, talking about “Business Disruption” is all the rage. Disruption is now synonymous with innovation which is synonymous with winning. Uber and Amazon are “Disrupters”. Uber has redefined on demand car service and Amazon owns online buying, shipping, delivery and now Digital Cloud solutions. It seems simple in concept, but is elusive in practice. Very few businesses seem to actually deliver the innovation required to become “Disruptive” and with the process and compliance complexities of mortgage lending, the goal is doubly challenging. Disruptive business models imply a willingness to think differently, operationalize a vision and leverage new technologies to deliver it. After recently seeing the latest trailer for this year’s Star Wars movie reboot, it occurred to me there are a few interesting parallel storylines with the mortgage industry worth exploring.

First the original concept of “The Force” as an omnipresent energy available to all, but leveraged for advantage by a precious few (Yoda, Obi Wan, Luke), reminds me of how so few lenders take advantage of optimized processes, proven technologies and innovative tools available. Ironic, because lenders seem to understand mastery in these areas is crucial to winning in an increasingly competitive purchase money environment, while unwillingness to challenge outdated thinking inevitably leads to the Dark Side.

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Also, in the original Star Wars, Luke had innate ambition to do something important with his life. He was the very symbol of “Disruption”, capable of challenging the tyrannical grip held by Lord Vader. To achieve his destiny, Luke eagerly absorbed lessons learned from Obi Wan and trained with Yoda to improve skills, so he could harness “The Force” to his advantage and reach his fullest potential. Ultimately, he was successful when he teamed up with Princess Leah, Han Solo and R2D2, who provided vision, tactical skills and technical knowhow to defy all odds and destroy the Death Star.

Likewise, today’s lenders “feel” they have a higher calling to deliver on customer needs, focus on addressing compliance requirements and automating key processes to effectively compete. Most lenders seem to understand what they must do, and they discuss it, but they have yet to crack the code to harness their own “Force” and carve out their own market niche. They have a notion of some key ingredients but may lack the actual recipe to achieve Skywalker-like success. There are some likely culprits for this.

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First, most lenders develop a vision in the context of their existing franchise so it is nearly impossible to re-imagine their business models from scratch. Conversely, Luke left his home planet and his entire way of life to evolve into something brand new and exceptional. Second, lenders are consumed with day to day operations making it difficult to find time to consider new strategies, redesign current policies and rethink outdated processes. With existing operations come existing baggage and resistance to change. Contrarily, Luke’s only allegiance was to learning anew and putting teachings into practice. Lastly, lenders seem to have the greatest challenge with implementing new technologies. Their existing outdated platforms do not play well with advanced technology stacks designed with change in mind, so they dabble with point solutions instead of taking a disruptive transformational view. Luke, on the other hand, embraced quite the opposite approach. He knew technology created an advantage. Over the course of three movies he used R2D2, C3PO, the Millennium Falcon and his Light Saber with great effect to consistently overcome adversity and ultimately harness “The Force” to win the day.

So as a lender, becoming a “Disruptor” and harnessing your personal “Force” for good need not be so far far away. It is after all your destiny.   First, heed your inner calling to deliver service excellence within the constraints defined by the CFPB. Then develop a vision and reinvent your identity, processes and brand. Always partner with seasoned mortgage innovators to deliver flexible digital functionality for competitive advantage. And integrate the latest technology wherever possible to deliver lower cost intelligent loan manufacturing allowing all parties to proactively contribute to the process.  There can be no try; there is only do. And if you do, you will surely rule the mortgage galaxy.

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Successful Lenders Will Innovate

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As we all know, it has been a bumpy ride in the mortgage industry. The run up to TRID was very stressful for many. With that behind us, the most successful lenders will now innovate. Here’s an example:

In the eight minutes it takes a space shuttle to reach orbit, Americans will now be able to receive a full mortgage approval online with Rocket Mortgage by Quicken Loans. More than 500 Detroit-based developers, designers, QA technicians and business analysts from QL Labs — Quicken Loans’ technology innovation team — have worked for over three years to completely redesign the highly complex mortgage process. Rocket Mortgage brings the home loan experience to the fingertips of consumers whether they are at their desktops or using a mobile device.

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“We changed the mortgage industry when we created the first 50-state online retail lending platform that has since helped millions of Americans achieve their home financing goals, while experiencing the best client service in the nation,” said Bill Emerson, Quicken Loans Chief Executive Officer. “Today, we took another monumental leap forward with the launch of Rocket Mortgage, which brings simplicity and clarity to the home loan process like never before, while delivering solutions at unimaginable speed.”

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Rocket Mortgage users will:

>> Experience the cleanest, easiest and quickest mortgage application ever created, complete with e-signature.

>> Visually compare and customize interest rate, mortgage term, monthly payment and fees based on individualized financial information and goals and current underwriting guidelines for numerous products with real-time pricing.

>> View their individualized three-bureau credit report, analysis and score in a format that is concise, understandable and digestible.

>> Import and verify asset, property and income information – all online via proprietary interfaces designed by QL Labs with numerous partners and databases throughout the country, eliminating the need for consumers to provide supporting loan documents manually.

>> Receive full approval in minutes on conventional, FHA or VA mortgage products with the click of a button from Quicken Loans’ proprietary interface to agency underwriting engines.

>> Lock their interest rate.

>> Conveniently view all loan documentation and details online, anytime, anywhere. Users no longer need to rely on information relayed over the telephone, email, face-to-face or through the mail.

“Rocket Mortgage simplifies the largest, most complex and important financial transaction most consumers experience in their lifetime,” said Linglong He, Quicken Loans Chief Information Officer. “Our team at QL Labs has worked tirelessly to ensure that Rocket Mortgage users have the same award-winning experience that has made Quicken Loans an eight-time J.D. Power top-rated mortgage lender for client satisfaction.”

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Getting Borrowers To Self Serve

RealtyTrac has launched its enhanced Marketing List Lead Generation Platform allowing customers to leverage RealtyTrac’s nationwide real estate data on more than 120 million U.S. residential and commercial properties to create targeted marketing lists in a convenient, self-service online interface. Here’s how it works:

“With RealtyTrac’s proprietary real estate intelligence and extensive mailing list development, you get the data segmentation and modeling information you need to precisely target your outreach and fuel customer acquisition and retention,” said Rob Barber, CEO at RealtyTrac. “Users can find homeowners nationwide based on geographic and demographic characteristics.  This opens up numerous new marketing list applications for virtually every type of business looking to market its products and services to a specific subset of U.S. property owners.”

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Registered users can create customized lists in real time with the counts of available records updated daily. Customers pay per property record downloaded, and can preview the number of records that match their criteria before downloading.

“More important than the vast size of our dataset is the quality of our data,” said Kevin Kerley, director of data solutions at RealtyTrac. “While many data providers merely resell third-party lists, we collect data from a broad range of sources. Our lead generation platform allows you to target new homeowners, renters, high-income households, and countless other demographics. The ability to create and refine a list of targeted leads makes our Marketing List platform the perfect tool for retailers, financial service firms, Realtors, and other business owners.”

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Target customers via email or telephone with targeted mailing lists featuring:

  • Current property status information (owner-occupied, rental, investor-owned)
  • Loan-to-value (LTV), current market value and assessed value
  • Detailed loan information (interest rate type, loan type, lender, lien position)
  • More than 400 property attributes (property type, lot size, year built, bed/bath count)
  • Key demographic characteristics (30+ including age, income, children and more)
  • Enhance existing data – RealtyTrac can match existing files against assessor and recorder data information to append valuable data

“As your one-stop source for marketing lists, we are dedicated to providing you not only quality data but also excellent service, support and the resources you need to make your next marketing campaign a success,” said Richard Lombardi, EVP/GM of Data Solutions. “Our goal is to help you reach prospects when they are most in need of your services. Our lead generation platform allows you to market to prospects when major life events happen.”

Five Key Ingredients For Successful Long-Term Lending To The Millennial Borrower

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Terry-AikinWe’re halfway through 2015, and many lenders are still holding their breath waiting for the TILA-RESPA Integrated Disclosure rule (TRID) to go into effect. We all fear the unknown, but lenders can take rational steps to get ready for TRID by adjusting their lending, their lending strategies and improving existing processes. We make adjustments today to prepare for tomorrow.

I’ve traveled to a dozen industry events, listened in on the latest the CFPB has to say, and tuned in to how lenders are reacting to TRID. While many in the industry may want to close their doors and hunker down in preparation for TRID, the world around us does not stop because of an impending regulatory change. Many regions and cities continue to enjoy a robust real estate market and recovery, and with interest rates low but trending upward, many borrowers are actively in the market for a home. Instead of worrying about TRID, lenders should be turning their focus to ways to reaching the emerging Millennials market.

People, process, and technology remain the key to business success, but while this may be true at the most basic level, we all know that nothing about the mortgage industry has been simple or straightforward for many years. The recipe for success in today’s all-digital age is much more complex. Our industry faces uncharted territory; we are still transitioning from the all-time high of the refinance boom to the current reality of purchase lending and higher costs to close. This new lending environment presents us with new opportunities.

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One of the biggest opportunities is the arrival of the Millennials to the housing marketplace. Millennials are the next first-time homebuyers and the new face of lending. There are 86 million of them in the US, and they now represent the largest generation in the workforce. They cannot be ignored; rather, they should be cultivated. We see five key ingredients in the recipe for successful lending to Millennials:

Defined Goals. You must define measurable goals to achieve your future vision. Your goals should be unique to your target market and the strategy of the organization. This, along with any number of factors, will help you define and adjust your goals. Goals, such as increasing the number of loans made to Millennials, should be measurable and bucketed in near-term (1-2 years) and long-term (3-6 years) categories. If you cannot measure the goal, it’s a vision. Your vision belongs in another area of your plan — not under goals.

Measure your goals monthly, quarterly and annually. Consider: Cost-to-Originate, Cost-to-Close, and Gain-on-Sale (GOS) Leakage. GOS Leakage is the difference between the expected gain and actual gain on sales. A CMB colleague once explained to me that most lenders are unaware of this issue. Many mortgage lenders don’t know they have a problem because they don’t closely monitor changes in Gain On Sale. Often times this occurs when the investor’s lock price and margin are altered in a company’s loan origination system after the loan is purchased, often without a date- and time-stamp. In essence, someone changes the original lock price and GOS to match the figures on the purchase advice. If this occurs, there is no way to measure the difference. Pre-purchase or delivery issues can also cause delays in the loan purchase, which can result in extension fees or even having to resell the loan to another investor at a loss. There are several other sources of GOS leakage that result in a reduction of revenues. The key is to monitor each loan to ensure there is little or no difference in the expected and actual GOS.

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Strategy. Your strategy should be based on meeting your goals for the future. As mentioned, the industry we see before us is not at all like the industry we have known. The refinance boom we saw over the last few years appears to be a thing of the past. With new regulations in place and a rebounding purchase market, identifying the impact this has on your strategy is crucial.

As the industry changes, so may your strategy. Just like an endurance race, the key to winning typically isn’t in making broad, sweeping changes, but rather in careful preparation, making small corrections along the way, and tenacity. Consider and measure your market penetration. Whether you’ve reached saturation or are still expanding, home buying behaviors will change over the next couple of years.

The borrower experience throughout the process — whether digital, face-to-face, or over the phone — must be highly personalized to meet the needs of tomorrow’s consumers: Millennials and minority buyers. How will you get there? Mobility, integrating apps, and cloud systems could be an answer. A simple first step could be changing your website flow to make it more intuitive and adding online mortgage applications.

People. The foundation of any successful company, I would argue, begins with great leadership and the right people. Hire smart people that are culturally aligned with your organization and demonstrate the ability and desire to learn, and you’re on your way.

How do you measure or anticipate future performance to meet the needs of your business and lending strategy? You must ask yourself if you have the right people for the changing environment. Can they help you achieve your lending strategy? If the answer is yes, take steps to increase their knowledge and test it, and take actions to regularly demonstrate how “they” and “their role” are critical to the success of the department and organization. The Mortgage Bankers Association recently launched MortgageBankingBound.com to help educate college students about the mortgage banking industry. Education and testing like this is a good place to start. Remember, Millennials aren’t only your soon-to-be customers, they are your current and future employees.

Cost-to-Close. As mentioned above, cost-to-close is simply the sum of mortgage labor costs, direct mortgage costs, indirect mortgage costs and mortgage technology costs divided by the number of closed loans. We all know what we want out of this. The lower the cost-to-close, the more profitable and competitive the lender will be. Study after study tells us the technology cost component is by far the smallest expense in the equation. Labor, in contrast, is always the largest. Lowering costs is a matter of leveraging the former, which, if done properly, reduces the latter, thereby lowering the cost of lending.

Market trends have a great impact on this measurement. Cost-to-close, for most lenders, is up this year over last year, due to the switch from a heavy refinance focus to a focus on the purchase market. Purchases are inevitably more complex and time-consuming. So how can lenders lower this measurement? High performance lending is dependent upon productivity. Add a new market — for example, by working more closely with first-time buyers — or gain new market share without adding staff, and your productivity will go up. Also, take a look at your internal efficiencies. Is your team inputting the same data multiple times due to disparate systems or redundant processes? Many redundancies can be found in manual compliance checks, imaging, and document production areas of the loan manufacturing process.

Technology. Technology is the great unifier. Mortgage lending has undergone a remarkable transformation over just the past decade. Mortgage lending has traditionally been a disjointed process, requiring interactions with multiple systems to close just a single mortgage. Lenders are now realizing these methods are antiquated. In order to see their cost-to-close go down, lenders need a system capable of getting borrowers to the closing table faster. Online is now where it’s at – especially as it relates to the all-digital Millennial borrower. Lenders not online are bound to miss out.

Lenders should make every effort to meet Millennial borrowers where they spend their time — on their phones, tablets, and computers. These lenders should be connected and innovative, finding technology that positions them for the upcoming all-digital mortgage revolution. Some mobile technologies can combine spending/saving psychology, behavioral science, location data, and other services (such as debit card and payments). This offers Millennial consumers real-time, context-based feedback on their daily spending levels and options for saving money, thus engaging them in a more compelling way. Buying behaviors are changing; the lender’s goals, strategy, and technology must also change to stay relevant in tomorrow’s all-digital mortgage lending environment.

I’ve spent nearly my entire career in the mortgage industry. One thing it has taught me is to expect and embrace change. We need consistent ingredients and careful measurements to benchmark our business success. No matter the ups and downs we may face in the years ahead, tracking to definable processes and measurements will allow lenders to know when something is working and when it is time to move in a new direction. Taking the right steps today positions lenders for success tomorrow.

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Get Your Mortgage Info Online

Bills.com, the leading resource for free and personalized money help, has entered into an agreement with ClosingCorp to provide detailed closing cost data and a consumer-facing, closing-cost calculator for Bills.com users. Every month, more than 6 million consumers visit Bills.com’s online properties to find information on mortgages and other financial products, compare interest rates and terms, and receive offers from leading lenders. As a result of this agreement, Bills.com users will now be able to input a minimal amount of information and see a very “tight” estimate of the amount of fees and costs—such as title and transfer taxes—that might be required to close their loan.

This will provide transparency into the hidden costs of mortgage origination and prevent unhappy surprises at the closing table. A recent study, conducted by ClosingCorp, showed that two-thirds of Millennials were unaware that there were closing costs during the home buying process.

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ClosingCorp tools help consumers understand the rates and fees for closing-related services in their specified county. Consumers can enter a state, county, transaction type, purchase price and loan amount, and then receive customized closing cost calculations. These costs can include appraisals, title and settlement, inspection services, transfer tax, recording fees and more.

“For the past nine years, Bills.com has provided consumers with unbiased information from professionals and the ability to view customized loan offers, based on qualification criteria and programs from some of the best lenders in the country,” said Ethan Ewing, President of Bills.com. “Our deal with ClosingCorp now allows us to supply our customers with more complete details on the costs and fees associated with purchasing and refinancing a home, so they can go into the biggest transaction of their life with their eyes open.”

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Brian Benson, CEO of ClosingCorp, added, “Bills.com offers broad access to consumers who are seeking insights and information to make informed financial decisions. ClosingCorp tools and data can give these consumers a more complete picture of the costs of buying a house.”

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Take Notes Mortgage Industry

The mortgage industry should do something like this with mortgage loan offerings to reach young people: the Indiana Secondary Market for Education Loans, Inc. (ISM) has agreed to cover the membership cost for Indiana students who use Overture Marketplace, an online platform that provides students and their families an independent, transparent and unbiased way to compare private student loan rates and terms from multiple lenders.  ISM Education Loans provides Indiana students and their families with information and a variety of solutions for paying for higher education with the least debt possible.

“We couldn’t be more excited to help bring this valuable loan comparison tool to all Hoosier students,” said Joseph Wood, president of ISM.  “Students need to understand how these loans work and to investigate all of their options before borrowing.  Overture Marketplace helps them do so in an easy and effective way.”

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“We have worked very closely with ISM for years and are continually impressed with their dedication to helping students save money,” said LeRoy Pingho, CEO of Overture Technologies. “Based on ISM’s mission, it came as no surprise when ISM said they would sponsor the membership so Indiana students would have no-cost access to the Overture Marketplace.”

Marketplace is the only place where students or their parents can complete a simple interview, have their financial qualifications compared to multiple lenders’ criteria, and instantly see personalized rates and terms for private student loans before applying with any lender. Users can review and sort their loan results by financial terms such as total cost, fixed- or variable-rates and repayment options.

Since 2009, Overture’s Marketplace has pioneered online loan pre-qualification and comparison by providing market transparency, fostering more efficient prices and innovation as lenders compete. Users can also identify important non-financial features that they want to consider in their decision-making, such as the lender’s co-signer release policy or deferment options.  By pairing side-by-side loan details with helpful information about the meaning and relevance of key terms, Marketplace can help students shop quickly and save hundreds of dollars or more on a typical private student loan.

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Overture’s Marketplace bases results on meaningful information about borrowers’ credit qualifications, including a full credit analysis option, in order to produce accurate, personalized results – not rate ranges or deceptively low “estimated” rates. For these reasons, Marketplace has received strong support from the Association of Independent Colleges and Universities and its more than 1,000 regional members.

In my opinion, the next step should be to offer these students info on mortgages after they graduate.

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Elevating Online Lending

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There is a big push by regulators to be more borrower friendly. What does that mean? That means improving the mortgage experience at the point-of-sale. How does that happen? In part it happens when lenders take a second look at technologies like consumer-facing websites. It you want to win the battle for the borrower, you have to have a great online presence. Wayne Steagall of Lending Manager talked with us about what every lender needs to do to be an online lending leader. Here’s what he said:

Q: What online lending trends do you see taking place in 2015?

WAYNE STEAGALL: We believe that there will be a significant increase in the amount of online loan applications and online lending documents in 2015. Today’s borrowers are more tech-savvy and expect to do business with lenders online. They want to go online when and where it is convenient for them, typically during non-traditional business hours. It may be at 4:00 AM before they leave for work or as they are waiting to pick their kids up from soccer practice.

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They expect a robust online lending experience that delivers in-depth information on loan programs, interest rates, closing costs with the ability to access the lenders website on their tablets, or smartphone; they demand this information and status updates instantly. The website needs to have a simple yet elegant design that is easy to navigate and provides the type of information that potential borrowers are looking for.

If lenders don’t provide this type of online lending experience the potential borrower will simply move on to the next lender. Companies that have long ignored their online lending strategy are quickly realizing that online lending is a business imperative and are now focusing heavily on their web presence, borrower experience and online lending technologies to meet the needs of today’s borrowers.

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Q: How has online lending changed over the last 5 years?

WAYNE STEAGALL: The biggest change in online lending in the last five years is lenders’ understanding that a strong web presence has gone from a “nice to have” to “need to have”. It is now a business imperative that lenders must focus time and resources with their web presence if they want to remain competitive.

Millenials do business online and expect their lender to do the same. As millenials continue to represent a larger share of new home purchases, lenders can’t afford to ignore this segment and their online lending expectations.

In addition to online lending becoming a business imperative, lender websites are being more widely used in purchase shops, and not just for refinance heavy lenders. Online lending is now impacting all lending channels.

Q: What are today’s tech savvy borrowers looking for in an online lending solution?

WAYNE STEAGALL: Borrowers expect more from their lender and that includes a great website. Here’s what we think makes for a great mortgage website.:

First, its got to be visually appealing design that matches corporate branding.

Second, it has to have simple navigation menus (“Don’t Make Me Think”).

Third, it has to have useful content for borrowers and referral partners.

Fourth, it needs powerful Call-to-Action buttons (“Apply Online”).

Fifth, a domain name that’s easy to remember is critical.

Sixth, there has to be integration to back office systems (LOS & CRM).

Seventh, the website needs to be user friendly so it can be updated quickly (doesn’t take a week).

Eight, it needs to be mobile and tablet device friendly.

Ninth, the website has to have the ability to apply with a company or loan officer and submit.

Lastly, borrowers need to prequalify or fill out the 1003 application at their convenience by uploading their documents through a secure portal instead of needing to fax or FedEx their documents.

Great websites deliver a dynamic user experience that today’s borrowers demand.

Q: Does the right online lending solution level the playing field and allow lenders of all sizes to compete?

WAYNE STEAGALL: Yes, your website is one of the first places a consumer goes to find out more about your company. A large company with an outdated or poorly maintained website can lose out to a smaller lender with a strong web presence as the consumer can see it as a reflection of the overall company and comfort level with that particular lender. Great websites deliver a dynamic user experience while leveling the playing field for lenders of all sizes.

Q: How has the influx of mobile technology and social media changed online lending?

WAYNE STEAGALL: Today’s borrowers are on the go and accessing websites from their mobile phones and tablets. Your website must be mobile and tablet friendly, or your potential borrower will simply look elsewhere.

Mobile has helped make the loan process available 24/7 (not just at a computer) and improve the efficiency of the loan process. Borrowers can even apply on their mobile website while sitting with their Realtor or Loan Officer instead of waiting hours or days later for a response.

Social media is heavily regulated for lenders, but if done correctly can help drive traffic to the lenders website with a higher conversation rate since it’s from trusted friends/referrals instead of generic search engine or banner ads.

Q: What do millennials require when they go online looking for a loan?

WAYNE STEAGALL: Millennials demand a robust website that delivers critical lending information in a simple and easy to use site. They expect a quick, efficient website that either lets them find out more about a lender and their lending options or it delivers a simple and easy to navigate website so that they can apply online at their convenience (instead of scheduling an appointment and filling out a paper application in person).

If the lender can’t deliver a great borrower experience online the potential borrower will simply move to the next lender.

Q: Is online lending still considered by many a nice to have or is having an online channel now a business imperative?

WAYNE STEAGALL: As mentioned above, online lending is now a business imperative. If a borrower can apply online with a competitor at 2 AM or they have to wait to visit your office in person several days from now, your competitor has a huge advantage.

From a cost standpoint, online lending can make loan officers more efficient and lower production costs. This provides lenders with another competitive advantage and point of differentiation when borrowers are surfing the web for a new loan.

Q: How do online lending solutions impact the borrower experience?

WAYNE STEAGALL: Today’s borrowers are online for every aspect of their lives. They know what a great user experience delivers, whether that’s from Apple, Google or the like, and they expect that same type of experience when dealing with a lender.

If the lender’s website doesn’t contain the information that the potential borrower is looking for, if navigation is confusing, if they can’t access the website from their smartphone or tablet it creates an extremely frustrating user experience for the potential borrower. When that happens, they simply move on to the next lender and never come back to your site.

Applying for a mortgage is one of the largest financial transactions of a person’s life and most will only go through that process once or twice every decade, so delivering a great customer experience, one that it as simple and accessible to the borrower is critical. It is critical not only for that loan but for the potential referrals that borrower will provide to other potential borrowers.

Q: Where do you see online lending going in 2015?

WAYNE STEAGALL: As we have already discussed, online lending is now a business imperative so you will see much greater traction of online lending by lenders in 2015.

In addition, online lending technology is becoming more cost effective for smaller lenders, which makes adoption widespread in the industry and creates a standard where borrowers can reasonably expect to handle part of their mortgage process online (application, documents, signatures, etc.)

Mortgage companies will shift more of their print marketing into online advertising but they will be focusing more on taking applications instead of simply lead data (name, email, phone). Today’s borrowers are online and if lender’s want to capture their business they must also be online.

Q: What can we expect to see from Lending Manager in 2015?

WAYNE STEAGALL: At Lending Manager, we are passionate about delivering great websites to our lender clients. We are constantly working to enhance our offerings to deliver the best possible online lending experience. We are investing heavily in the next version of our mobile websites. Borrowers accessing our clients website through mobile devices has increased significantly over the last year with 15 – 20% of daily website traffic coming directly from mobile or tablet devices.

Our newest website designs incorporate our best practices from managing 5,000+ mortgage websites to help our customers increase the conversion rate of consumers to borrowers from their website and in turn increasing the ROI/Profitability of their online lending channel.

We will continue to enhance our strategic partnership with Integrations to even more mortgage technology providers to help our customers save money. This will create additional production efficiencies in the back office, including loan officers taking more applications online and processors collecting borrowers documents securely.

We are committed to providing our customers with dynamic online lending solutions that enhance the user experience of borrowers while deliver significant ROI to our lender clients.

INDUSTRY PREDICTIONS

Wayne Steagall thinks:

  1. Mortgage companies will invest more into their websites, specifically for purchase business.
  2. Borrowers will originate a larger percentage of their applications through mobile and tablet devices.
  3. Lenders will use their web presence to help automate certain parts of the loan process and realize cost savings.

INSIDER PROFILE

Wayne Steagall is the Founder and President of Lending Manager. As President of the company, Wayne works to help mortgage companies take their business online. He works with both customers and partners to help streamline their mortgage processes through automation and technology integrations. Over the last 18 months Lending Manager has expanded to over 3,500 loan officers currently process over $2 billion in loan applications online per month.