Steps for Post-COVID Mortgage Lending Success

Sponsored by Origence

We are living in fast-changing times. Lenders that fail to meet the changing demands of borrowers will be ill-equipped to compete for their business. While other industries have learned to deliver high levels of customer engagement and satisfaction online, many lenders are still originating loans much as they were 20 years ago.

However, COVID-19 may be the catalyst that drives the industry forward.

What will mortgage lending look like in the post-COVID world?

Setting the Mortgage Industry Up for Success

While the full effects of the global pandemic are still unknown, we do know that it has driven commerce online. The tech giants have done a great job of keeping consumers transacting, even for some very complex products and services.

To do the same for home finance, lenders must meet a number of new borrower requirements. Doing so will require a mix of new technology and new processes.

Here are six key requirements necessary for lenders to meet borrower expectations, gain a marketplace edge and sustain loan growth.

1. A customized experience on any device. There is no one-size-fits-all approach to the new mortgage lending business. Consumers want the freedom to transact on any device and receive a personalized experience.
2. Easy online pricing and shopping. Many mortgage borrowers are beginning their journey online. If they don’t find a lender’s offerings there, they will simply seek out another lender. This is how today’s consumers shop.
3. Scenario building and comparison capability. Today’s borrowers don’t just want to find products. They want to understand how their various options stack up against each other. It falls to the lender to make this clear to them.
4. An easy and intuitive online application. We know from experience that if we don’t make the application simple and convenient, lenders won’t get prospective borrowers to apply. Once we get the information required to issue a loan estimate, the clock starts ticking.
5. Interactive workflows. The process must be customizable for different borrowers and products. Lenders must efficiently collect the information needed to close, working in parallel if possible. Closing electronically is the goal.
6. Maintain constant communication. Throughout all of this, the lender must remain in contact with the borrower. This is where the big tech firms have set the bar. Failure to keep consumers informed degrades their experience.

Delivering on the New Mortgage Promise

Some of this technology is already available to mortgage lenders, but few if any lenders have combined all of this into a seamless offering for American home loan borrowers. To do that will require a great deal of thought, strategic planning and a high degree of automation that goes well beyond simple business rules loaded into a decisioning engine.

The key to success will involve deploying technology that is advanced enough to know when a deal requires the attention of a human. Only with exception-based processing can we scale the type of loan origination experience that today’s borrowers demand. But it will take more than that.

During the development of our new Origence Mortgage Loan Origination System, we uncovered three areas where technology offered significant benefits to lenders.

• Workflow automation. This includes tasks, third-party interfaces, calculations and notifications that recognize the state of a loan and can perform the necessary steps to move the loan forward toward closing.  
• Use data rather than documents. The preponderance of digital data available for originating mortgages has grown by leaps and bounds in recent years. Origence is built around collecting those data and enabling the system to use that data to drive more automation and increase efficiency.
• Compliance automation. Compliance checks are automatically conducted by the software at various points in the process, while also having the ability to create and respond to dynamically generated compliance conditions.

With these steps and the right technology and functionality, credit unions will be well-situated to deliver on the new mortgage promise now and when the pandemic ends.

Andrew Weiss is SVP/platform strategy for CUES Supplier member Origence, Irvine, California. He has over 30 years of experience in the mortgage and consumer lending space, is well-versed in technology and was instrumental in developing Desktop Underwriter when working for Fannie Mae.