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The Drawbacks Of Developing Your Own Digital Mortgage Solution In-House

In today’s thriving mortgage industry, lenders are jumping at the chance to implement digital point-of-sale applications (POS). While some lenders have made the decision to develop their own application and website in-house, other lenders have taken the initiative and devoted this job to experts in the software development space to handle. In doing so, lenders assure that they create a digital mortgage platform that both benefits their borrowers and reduces operating costs.

Building a digital mortgage solution from the ground up is not as easy as it may sound. It is 2018 and technology has grown rapidly over the last ten years or so, becoming more complex and involved. As it continues to change, we will be faced with new and more in-depth challenges that we have to be readily equipped to tackle. There is nothing truly straightforward when it comes to today’s technology and quite frankly, lenders don’t have the time to develop their own advanced solution in-house. They need to be devoted entirely to the borrower, rather than grasping at straws attempting to develop their own digital mortgage solution.

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Part of having a fully developed digital mortgage solution includes a POS system. Thanks to digital POS applications, lenders can now validate a borrower’s employment, assets, and income all within a matter of seconds, which is how the mortgage approval process has been sped up.

POS systems enable lenders to give their borrowers an all new, digitally enhanced, and fully automated mortgage application that cuts operating and closing costs while saving time and energy. For example, a borrower and their loan officer can communicate back and forth through their loan portal, uploading documents, pay stubs, etc. without leaving the comfort of their living room. Due to the digital era, the borrower no longer has to go back and forth between their bank and their loan officer in order to get approved and close a deal. Whether they are on the go or sitting stationary at home, home buyers can easily apply for a loan online and get approved in a remarkable amount of time. What used to be more than a month long, ongoing process can now be done in significantly less time.

Award-winning digital mortgage solution providers are devoted full-time to developing these solutions which make them extremely difficult to replicate. Their developers are there to build, establish, and execute lenders’ websites, however their duties don’t end there. Digital mortgage solution providers are readily available to train clients on how to navigate their corporate site, branch sites, and loan officer sites as well as edit them themselves to incorporate features they may want such as adding or deleting a specific loan officer. Not only will they help you to become an expert on your own website, but they will also be there for any dilemmas that pop up. If a company is trying to build their own solutions in house, odds are that they are learning as they go; They work for a mortgage company, not a digital mortgage solution company. Therefore, they are not trained and are not as experienced as the developers who are doing this all day, every day.

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In addition, it is by no means cheaper for a lender to develop their own digital mortgage solutions in-house. The average salary for a typical senior developer is upwards of $100,000 which is approximately the amount, if not more, what they’d be paying a digital mortgage solution company. Keep in mind that you’d be expected to pay more based on their experience, as well. That is not including any other factors, such as hosting fees, server administration or what a they’d be paying for additional developers, project managers, etc. The bottom line is that development costs add up quickly.

Potential home buyers need a simpler, faster way to get a mortgage. In order to do so, there needs to be a development team solely devoted to providing the finest products on the market. Between the most up to date digital POS applications and custom website solutions, there is no need for lenders to waste time building their own digital platform.

POS applications need to revolve around efficiency. Let’s face it: not all questions on a typical 1003 application applies to every borrower. Therefore, individuals are answering questions that have nothing to do with them and doesn’t affect their loan. For example, leading applications in the industry have the ability to only provide the borrower with questions that apply to them. If a user states that they are married, another drop down box will automatically appear regarding number of dependents, and then their ages. Some borrowers feel overwhelmed with these mass amounts of questions, which is why providing them with only the questions that applies to them really matters.

Many providers run analytics on their POS application on a monthly basis. Where the industry typically has a 75% abandonment rate amongst digital POS applications, very few have as low as a 12% abandonment rate. With this being said, more borrowers are enticed to complete the application due to its overall smooth-sailing efficiency.   They can also analyze borrower behavior to see where users run into trouble in hopes of optimizing the product, allowing mortgage professionals to close more loans. This takes experience to accomplish, however. In order to complete features such as these in digital solutions it takes a full team of developers who know what they’re doing. Ultimately, a lender could be paying close to a half million when it comes to in-house development. They would need equipment, a well established team, plus the costs of managing and maintaining the solutions.

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In addition to in-house developed POS systems, one of the worst things you could possibly do is utilize the same website layout that every other mortgage professional is using. Not only does this make your website appear to be boring and unappealing to the borrower, but in-house developed websites also have a slew of other concerning issues that could affect your business as well as the individuals involved.

First and foremost, some sites that businesses are using to build their platform have security issues that could potentially put the borrower’s personal information at risk of a hacker. Some of them do not even limit login attempts, meaning that even if a hacker unsuccessfully breaches your login, your system can overload as a result. Your account can also then be suspended due to these failed login attempts. The PHP code that runs a website can also be easily exploited, which would give unwarranted access to the website. You must also keep an eye out for SQL injections where hackers try to insert data into your database in hopes of linking your site to malicious or spam websites. It’s best to avoid these horrendous problems that unfortunately do occur, and utilize a custom mortgage website where developers are trained to handle situations like these.

One of the biggest advantages of choosing a digital mortgage company rather than developing in house is being able to have a site admin manage websites for the whole team. This ensures that they are always compliant.

Aside from the extensive security problems that lenders can experience from an in-house website, they also must remember that added features like plugins, extensions, and add-ons will cost extra. As you can imagine, the price can add up in order to get the full website you really want. However, these extra fees can be avoided all together by utilizing a custom mortgage website that includes all of these services. All in all, this would be the right way to go if you want to ensure that homebuyers are going to choose you. Digital mortgage companies take their systems very seriously which is why more and more lenders are choosing them every day.

Many digital mortgage solution companies are centered around creating a lead capture friendly mortgage site with a comprehensive CMS (Content Management System), a prequalification application, member portal, LOS bi-directional sync, mobile responsiveness, and a wide variety of other features. These features help to further ensure the safety and privacy of homebuyers’ personal information. Loan officers and brokers even have the ability to use this system in order to obtain more leads online. In that way, these custom sites are always built with home buyers’ and the mortgage company’s best interests in mind. It is simply more efficient to pay a one-time fee and get exact what you want rather than finding your own developer and having to pay them more than what you’d be paying to out-source.

Remember, professionals who do this for a living will be able to do things that you’ve never even thought of, in a lot less time. Being a lending expert is one thing, but being a lending technology expert is a whole other circumstance. The main focus of a mortgage company should be on potential homebuyers, and not on their website. There are skillfully trained developers who put all of their time and energy into applications from start to finish which is why they will be more successful than any in-house development.

It’s understandable why building a solution in-house may seem like the best choice at first, but it’s important to review everything at hand before making the final decision. In the end, working with a digital mortgage company to get the full works may ultimately be the best option.

About The Author

Curt Tegeler

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

Enhanced Offering Provides Much-Needed Differentiator For Lenders

Mortgage Coach, creator of point-of-sale borrower conversion software, has partnered with Optimal Blue, a provider of secondary marketing automation. Through direct integration with Optimal Blue’s API platform, every Mortgage Coach application now seamlessly connects real-time, compliant product and pricing data with the compelling financial analyses Mortgage Coach is known for.

Through this collaborative effort and newly expanded product offering, Mortgage Coach and Optimal Blue enhance their long-standing strategic partnership and take their industry value proposition to a whole new level.

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“Without ever leaving the Mortgage Coach app on their mobile device, loan officers can create informative, side-by-side comparisons highlighting multiple loan programs and comprehensive pricing information in just seconds,” explained Bob Brandt, Vice President of Marketing & Strategic Alliances for Optimal Blue. “Combining the sophisticated product and pricing data at the heart of every mortgage transaction with a compelling user experience — and doing so whenever, wherever it matters most — is a game changer for the industry.”

The benefits are not exclusive to lenders and loan officers. Today’s consumers immerse themselves with the details behind major financial decisions and pride themselves on deeply understanding their alternatives. Mortgage financing is no exception. When provided with a comparative, in-depth analysis of the financial impact of their best financing alternatives in a highly consultative environment, consumers are more engaged with their loan officers and more likely to move forward with a loan.

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“In today’s price compression marketplace, converting every prospect into a borrower is the most important aspect of achieving increased profits for mortgage lenders,” said Joe Puthur, President of Mortgage Coach. “This new innovation gives lenders the instantaneous benefit of earning more commitments at a lower cost of acquisition.”

Mortgage Coach, the company’s flagship platform, is the technology behind the Total Cost Analysis (TCA), a report that illustrates the long and short-term impact of any loan program on the borrower’s financial situation. The TCA incorporates real time rates, fees, closing costs, and program information and presents its findings using simple yet powerful graphical elements like charts and graphs. The TCA provides a level of clarity that is virtually impossible to achieve without the Mortgage Coach platform.

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“The difference between using a TCA to explain mortgage options and using any other method is like the difference between having a film described to you versus watching it in high definition with Dolby sound,” explained Mike Hardwick, President of Churchill Mortgage. “Having been in partnership with Mortgage Coach and Optimal Blue for several years now, we’re happy to have helped thousands of borrowers make a better, more informed decision. These new capabilities will provide greater clarity, transparency, and confidence to any borrower – in a way that is faster for every loan professional.”

Redefining The Point-Of-Sale

PromonTech, the technology unit of Promontory MortgagePath, has entered into an agreement with ISGN to become the exclusive point-of-sale (POS) solution for ISGN’s MORVision loan origination system (LOS).

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ISGN MORVision users can now leverage PromonTech’s white-label, Borrower Wallet to engage and educate customers and prospects. Borrower Wallet provides a secure, borrower-friendly environment designed to build confidence and make it easy for the borrower to enter information, approve automated data collection, upload/e-send documents and stay informed throughout the entire loan journey. Data and documents captured in the front end of the origination process can be seamlessly exported into MORVision via the PromonTech-ISGN integration.

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“Having a next-gen point of sale experience is increasingly becoming the cost of doing business in a digital mortgage world,” said Michael Kolbrener, chief technology officer of PromonTech. “Borrower Wallet engages with customers using any computer or mobile device, on either a self-serve or loan officer-assisted basis. We look forward to working with ISGN and its LOS users to enhance both their customer experience and their efficiency.”

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“By partnering with PromonTech, our clients will have access to an advanced, customizable front-end solution, at a fraction of the cost of developing one in house,” said Amit Kothiyal, chief executive officer of ISGN. “Borrower Wallet is an elegant digital solution for both consumer direct and loan-officer centric lenders.”

Bringing High-Touch To High-Tech

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

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

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

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

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

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

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

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

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

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

About The Author

Curt Tegeler

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

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.

Get Smart About Your Point-of-Sale

Imagine this, you invest in creating a state-of-the-art website to compete in today’s digital mortgage revolution. Your website conveys the most critical parts of your brand and maintains a consistent theme throughout every page. However, there’s a problem. When a borrower types “mortgage” or “mortgage application” into Google, thousands of results come up in the search. Because of this, you decide to employ search engine optimization tactics. Great, you are more visible on Google and traffic is being driven to your site. People are so impressed, they decide to fill out a pre-qualification application or even apply for a mortgage. Let’s say a couple begins to fill out the application, they enter in their names, their dates of birth, and all required information. The couple clicks and continues to the next page and then, something happens. They realize that they forgot to put the middle initial in one of their names. The couple tries to go back but is unable. Frustrated, the couple abandons the application. That right there is the scariest part of the digital mortgage process. You invest money in a beautifully designed site, spend time boosting your Google search results, and lead a client to apply for a loan all to have them abandon the application before it’s even completed. This is the reason that having a strong digital point-of-sale (POS) application is so critical in providing a digital mortgage experience to turns leads into loans.

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There are five key components that separate a point-of-sale in today’s most advanced digital solution. The first major component is cleanliness. Your POS needs to be clean on every level. Let’s start at the software level. Any imperfection in the software will result in hiccups that make borrowers abandon the application. Borrowers need to breeze through a digital application with ease. There are too many other things they can get distracted by on the Internet. If you give your applicant one second of difficulty, or one second to contemplate whether they want to complete the application, you risk losing them. Competing for people’s attention isn’t easy, especially in the digital landscape. This is the reason it is so important to keep your users attention at all times.

Clear labeling, prompts and directions tell applicants how to properly input information and guide the borrower step by step. Your digital loan application must also be easy to complete by even the least tech-savvy borrower. It’s easy to get lost with so many different pages, tabs and lines of information to fill out. Your POS must not only guide borrowers through each step, but afford them the ability to go back and forth and jump around. Moreover, borrowers should navigate the application with ease through a dashboard or content map.

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The digital mortgage experience entails much more than having a website where borrowers can enter their information. It envelops integrating with mission-critical third parties, verifies borrower information in real time and streamlines the loan origination process. The digital mortgage affords loan officers and borrowers alike the most valuable asset and that is time. By expediting the loan origination process, they avoid waiting for weeks on end to verify assets and other pertinent information. If your POS doesn’t integrate, then you don’t have a digital POS. A POS that doesn’t integrate is a data collector at best, that merely changes the application process from handwriting information to typing it. A POS that integrates transforms the application process into the digital mortgage, where data gets verified in real time and more loans get closed.

Integrations include, but are not limited to: pricing engines, loan origination systems, customer relationship management systems, credit bureaus, asset verifiers like FinLocker and Account Check for bank accounts, and location pre-populators such as Google Maps. Integrating with these third parties means that the POS does the work for the borrower and loan officer. Integrations with credit bureaus verify borrower information while he/she fills out the application; integrations with asset verifiers connect all of a borrower’s bank account information with the ease of logging into your bank account; integrations with pricing engines do the math and determine proper, compliant loan terms. The list goes on and on. The main point is when all of these tools come together, it creates a dynamic POS and powerful digital mortgage experience.

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Along with integration comes the need for automation. Automation delivers some of the most useful impacts of technology. With automation, technology does the work for you. You don’t have to guide it, direct it or check up on it. Automation streamlines the loan origination process and strengthens your integrations. Automation tells your POS to communicate with Google Maps when a borrower types information into the “Address” field of the application. This allows the field to pre-populate addresses as the borrower types. With each character the borrower adds, Google Maps automatically adjusts and refines the pre-populated addresses. Automation alerts borrowers when they fail to properly input information or skip a step. Automation creates loan terms based on applicant information computed through algorithmic calculations, ensuring proper risk-reward balance and the production of compliant loans. Basically, automation ties together all your integrations. Automation should follow integration, wherever it is.

Automation also drives real-time capabilities. If your POS doesn’t verify data while the borrower completes the application, then it’s not fast enough. A borrower should be able to complete your digital application in seven minutes or less. Basically, once a borrower completes an “Address” field, the POS should recognize and verify that address in seconds. If the application requests a social security number at the first step of the application, it should be processed and back-checked within minutes by the end of the application. If your POS doesn’t boast real-time capabilities, you’re giving your potential borrowers more chances to abandon the application. Borrowers can get pre-qualified for a mortgage within ten minutes of filling out a form. Millennials dominate the home buying market right now, and they demand speed. The Internet, text messaging, social media, and all things digital deliver information so quickly and so readily that it shifted their expectations and perceptions of how things should operate. Applying for a mortgage is no different. The millennial borrower wants to know how big of a mortgage they can get at what rate, so they can launch a new tab and start searching for homes.

Let’s imagine your POS offers all the above: cleanliness, integration, automation, and real-time capabilities. With these components, chances are your borrowers are going to complete their application. But, what happens after the application is completed? The mortgage application began online; the rest of the process should operate online, too. Moreover, the post-application process should operate within the POS application. Mortgages entail the handling of people’s most sensitive information and processing one of the biggest transactions of their lives. Thus, processes and communication among a borrower and loan officer need to exist in a secure environment. Loan officers should not email a borrower to follow up on a completed application. Rather, POS’s should equip borrowers with a secure log-in to return to their application and even provide them a easy to use dashboard. There, they can return to the application to look over and edit any information, and also communicate to their loan officer and upload any pertinent documents. The optimal POS is so much more than just a 1003 application. It’s a borrower portal to handle all things mortgage, from getting pre-qualified to signing a closing contract. In order to deliver an advanced point-of-sale, it’s not just strictly about the technology. There has to be someone that actually understands the life-cycle of the loan process for overall improved loan experience.

If you invest in the right POS application, you’re bound to see a return on your investment. If you choose the right POS, it’s like hiring an employee. POS’s done right streamline workflows and automate processes. It does so much for mortgage companies and loan officers, it easily becomes your most valuable employee. Imagine that: An employee that never makes incorrect calculations, automatically maintains compliance, and gets things done in seconds that takes minutes, hours, days, or weeks for others. I think you’d pay up to match that employee’s salary. So, don’t think of investing in a digital POS as an added cost. Think of it as a cost reducer, compliance manager, and business streamliner. In the end, you are not only saving money on origination costs, but you are making more money through closing more loans.

About The Author

Kelcey T. Brown

Kelcey T. Brown is Chief Strategy Officer & Executive Vice President at WebMax, LLC. Brown is responsible for developing, communicating, executing, and sustaining strategic initiatives. He acts as a key advisor to the company’s president on critical changes in the competitive landscape, internal employee development and the external business environment. Brown has worked for nine years in the Real Estate and Mortgage Technology Industry.

CRM Mainstay Acquires Point-Of-Sale Vendor

LoyaltyExpress, a provider of marketing automation and cloud-based CRM solutions for mortgage companies and banks, has acquired Lending Manager, a point-of-sale and website creator for lenders of all sizes.  The acquisition and integration of both companies’ technologies will help automate lead flow and associated marketing for all aspects of the loan process.  The combined company services 115 lenders with over 15,000 loan officers across all platforms. No sale price was disclosed.

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“The ever-increasing expectation of consumers during the lending process led us to this merger,” said Wayne Steagall, Founder of Lending Manager.  “We are thrilled to partner with LoyaltyExpress. We look forward extending our solutions backed with the power of the LoyaltyExpress creative and fulfillment teams.”

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“After extensive due diligence and market research, it became immediately apparent that Lending Manager delivers incredibly efficient and automated lead capture systems and attractive corporate and loan officer websites,” said Jeff Doyle, Chief Executive Officer of LoyaltyExpress.  “Wayne and his team have developed integrations with over 75 CRM, loan origination, lead management, and point-of-sale systems which is a growing requirement of any solution in the mortgage industry. We look forward to integrating CustomerManager with Lending Manager.”

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LoyaltyExpress simplifies CRM and marketing automation for banks and mortgage companies, including one of the top three retail lenders in the nation. Its flagship solution, CustomerManager, is an enterprise-wide, Software-as-a-Service platform that combines lead management, email and direct mail campaigns with a 360-degree view of each loan officer’s customers, partners and prospects. The MarketingCentral service delivers a web-based, sales collateral store powered by custom content creation and integrated print fulfillment. LoyaltyExpress eliminates the need to share sensitive customer data with multiple vendors and has a team of world-class marketing and branding experts with extensive experience in the mortgage industry. LoyaltyExpress is backed by New Capital Partners.

Lending Manager builds custom corporate and loan officer websites for lenders of all sizes. The Company delivers point-of-sale solutions with over 75 integrations with the leading mortgage technology providers. Lending Manager is based in Newark, Delaware.

Vendor Launches Next-Generation POS

Promontory MortgagePath, a new entrant in the mortgage technology and fulfillment solutions spaces, announced that PromonTech, the company’s technology arm, has released the next-generation of point of sale solutions (POS)—the Borrower Wallet. It is designed to help mortgage bankers level the playing field with the customer experience/digital mortgage solutions being offered by mega lenders.

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The Borrower Wallet is a white-label, omni-platform, POS that engages with customers using any computer or mobile device, on either a self-serve or assisted basis with a loan officer. The secure, borrower-friendly environment is designed to build confidence and make it easy for the borrower to enter information, approve automated data collection, upload/e-send documents and stay informed throughout the loan origination journey through loan closing.

One of the unique features of the Borrower Wallet is a dashboard that shows the borrower their key metrics—credit score, debt-to-income and loan-to-value ratios—that loan decision makers will use to approve their loans. The dashboard is continually updated as new data and documents are collected.

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From a lender’s perspective, the Borrower Wallet captures leads and fosters borrower/lender collaboration to drive enterprise efficiency and improve loan pull-through. In addition, its built-in collaboration tools deliver high-quality data and documents needed to feed and accelerate the downstream underwriting process.

The Borrower Wallet promotes both applicant self-service and values the role the loan officer plays as a trusted advisor. Lenders can accommodate their applicants anytime/anywhere in a secure workspace. Loan officers can be a true co-pilot, within the Borrower Wallet, enhancing the application process and loan quality ahead of underwriting.

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“Today, lenders are threatened by the disruptive force of technology, haunted by the lessons of the financial crisis and hamstrung by the plethora of regulations that grew out of the crisis,” said Bruce Witherell, chief executive officer of Promontory MortgagePath. “We’ve developed a collaborative, innovative approach to identifying and validating the applicant and their qualifying data. Borrowers can explore their mortgage options on either a self-serve or loan officer-assisted basis, using any personal device. For the first time, they can see their financial profiles, just as a loan decision-maker would. Lenders, regardless of size, can use our platform to level the playing field in an increasingly digital mortgage marketplace. As a company co-founded   by Gene Ludwig, compliance is an essential part of our DNA and is integrated into all aspects of our technology. So lenders can be assured that they are engaging with their applicants in a compliant manner.”

A Look Into The Future

Let’s consider the future of the mortgage industry. What once was an industry that thrived off paper, is today transforming into a paperless, digital process. The borrower demand for this change is rapidly increasing each day. Technology exists and is as convenient as being in the form of your mobile device. The ease and success of a mortgage company’s adaptation to this forthcoming truth means the transformation of moving forward as an adaptor. It is important for mortgage companies to listen to their borrowers and take the necessary steps to not only producing self-servicing platforms for everyone, but also keeping in mind millennials. The industry needs a determined effort to keep the overall process as accommodating as it can be. This exceeds generations and is an obvious obligation in many features of the mortgage process. Although some generations may not have similar outlooks as Millennials, the incorporation of contributions such as cutting-edge Web designs and skilled call center employees that promote mobile and paperless choices are encouraged by all.

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Some originators have already begun this progression. This innovative technology is key because it provides the consumer a faster and easier approach to the buying and selling experience. The mortgage industry needs a cohesive strategy to back a full-service, online experience. Today, mortgage companies need to appeal to millennials, while still appealing to key borrower markets. This is exciting for an industry that has struggled to go paperless for some time. The Real Estate industry has been close minded and considered it a risk to make such transitions during the credit crisis. Nevertheless, technology has proven that a larger quantity of deals closes at a much faster rate, and there is steady compliance after all.

Putting the need for innovative technology forth is crucial to provide clients a less stressful, more effective home buying and borrowing experience. Today, a self-serving platform for every contract and part of the borrower process has the potential to make a significant impact on the future. This is going to be an obligatory feature to remain relevant in the industry. Often, firms become absorbed in the cost of investing in the technology, but the key is to take a closer look at the consequences of not adapting. Taking a chance on timing the market and pushing significant changes to the side is a hazardous intention for buying and selling a home. The same applies to investing in important technology to remain competitive and up to date.

It is important to make sure you have the right tools for the job. Companies such as Optimal Blue and Nylex provide convenient pricing engines. Others such as Velocify and Velma enable an effective customer relationship management system that is beneficial to the lender and the borrower. The mortgage feature of these systems is just one part of the online real estate experience, and normally comes after all other elements, such as searching for a home. Some are convenient options being presented and others are more necessary, such as enabling access to documents and accepting electronic signatures. Mobile devices are at the core of most technology initiatives. As effective communication and connections improve the need for customer service and compliance, the mobile device is developing as the tool for enabling all contributors in the goal of communicating in a timely manner. The capability to be able to transmit forms at each phase guides the process to become more transparent and submissive.

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Some brokers are hesitant to these methods and look at them as more of a risk than an advantage. There is no question that mortgage brokers have certain rules and guidelines they are required to act on since TRID (TILA-RESPA Integrated Disclosure) came into place. TRID requires the need to accelerate timelines for acting on documents. Therefore, the initiation process needs to be moving at all hours. Online and mobile access to documentation is turning into a crucial and truthfully, the only option to meet these deadlines. There is opportunity to store, access and organize data in a much more accommodating process that could not be done using paper.

There have been firms that have built technology teams separate from creating loans. Every group should integrate a tech professional on their staff. Building the business takes technology skilled individuals, which is not in every case found in a loan officer’s skill set. Lending firms are building technology friendly teams and providing a more tech minded mission. They are not trusting their rank to make technology and vendor partner decisions. The tech team is beneficial and devoted to driving business through using objectives of a loan officer.

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If putting together a tech team is too difficult – the next best option is to establish a focus group of employees and customers. This provides an opportunity to determine the technology that is available for each group. Teams can research topics such as, the information they’d like to obtain from each other.

It seemed that in the past, technology and the mortgage industry lacked any sort of relationship. It became natural that each mortgage entailed hundreds of pieces of paper and that relying on stamps and office visits was the only possibility to complete a transaction. It is clear that over the years, obstacles have been faced and boundaries have been removed. The mortgage industry has become driven to let technology handle more of the responsibility. Because of this, things have improved significantly. The quicker a firm closes on a loan, they quicker they are ready to start the next loan. The client is ready to help, it is up to you to provide them to tools to do so.

About The Author

Zachary Rosenberg is Chief Technology Officer at WebMax, LLC. Rosenberg has more than fifteen years’ experience with software development and coding. He is responsible for overseeing all technical aspects of the company and its clients. He works with executive management to grow the company through the use of technological resources and works to attain the company’s strategic goals. Rosenberg also manages client relations from a technical standpoint, conducts research for the enhancement of our products, and development tasks.

Getting More Business

There is a lot of talk about how to get more business. Specifically, more and more lenders are using technology to reinvent the point-of-sale, but that’s not enough. To go further, the industry has to come together to stretch beyond just the point-of-sale. Here’s one way to start that dialogue:

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Join the California MBA on October 3rd at 11 am (PST) for a FREE webinar: “Learn to Win More Opportunity and Close More Loans,” presented by the California MBA’s Mortgage Technology & Marketing Committee (MTAM).

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This FREE webinar will cover the following topics: How to convert attention into interest, present with power, and elevate your skills.  Presenters include Greg Pettersen, Marketing Manager, Residential Wholesale Mortgage, Inc.; and Bill Bodnar, SVP, Sales, Vantage Production, and John Seroka, Committee Chairman, Seroka Brand Development.

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The URL link to register for the webinar is: https://attendee.gotowebinar.com/register/8659706686770656001

About The Author

Tony Garritano

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