Automation & technology

Better together: How partnerships drive lender efficiency


From the series:
Experience 2022

In today’s market, lender efficiency is more critical than ever for successful business growth. Instead of just focusing on managing capacity when refinances were booming, it’s now time to prioritize the customer experience. In this new podcast, ICE Mortgage Technology’s Eric Kujala, VP of Product Marketing, is speaking with Rajesh Bhat, CEO, at Roostify. Listen in now to learn how strategic partnerships can help lenders be more efficient and stay competitive. 

Welcome to our open house. Instead of examining hardwood floors, closet space, and kitchen layouts, we're taking you on a tour of what's happening across today's mortgage industry. During each episode, we'll hear from industry leaders and subject matter experts to give us an inside look into a hot topic, cutting edge technology, or new trend that can help accelerate your digital journey. Thank you for joining us. Come on in.

Thanks for joining. Another episode of Ice Mortgage Technology Open House. I'm Eric Cuella, Vice President of Product Marketing here at Ice Mortgage Technology. And with me today is Mr. Rajesh, Bots founder, cofounder. Cofounder. Yeah, Roostify. Yes, very exciting stuff. We've actually crossed paths before though, haven't we? This is true. We have. I've seen you. This would have been five years ago. I think the year was 2015. Fifteen. Was it that volume seven years ago? Yeah, you were. You're seeking inspiration. That's seeking inspiration. That's a good way to put it. And therefore you, you came across our company.

And you said this is pretty inspiring. It is. And I said, yeah, it is. He's like, it might not be what I'm ready for. It was an interesting time. It was a very interesting time. Part of it was you came into an office that was a shared office space that we shared with, I believe, a masseuse and an accountant and probably did not signal stability to person coming from the world that you were coming from. We had a really good conversation about where you wanted to take roots to fight, which is super exciting.

And here you are, ICE Experience 2022, one of our key partners for us. It's one of our most strategic partnerships and great relationship altogether. Yeah, we're big fans of the whole partnership. Our customers want more from us, but they also want options. Yeah, right. And they want to find the best and breed kind of technologies and partners to partner with. That's why we wanted to make sure we can cultivate this ecosystem. But I do have a question for you about the industry in general, very strong refi market, consumer kind of experiences have changed. They're now buying things differently, right? I think one of the stats that I saw online.

Purchase of cars prior to COVID was at 3%, during COVID was 30%. I can't say directly correlates, but there's definitely a consumer kind of trend there. But now we're going from a refine market to a purchase market. So what kind of things do you think lenders should be looking for to help kind of hold on to that purchase community? It's funny because when you and I first met, we were in something of a purchase market, right, and coming out of the financial crisis and we.

I think our company was really founded with a focus on delivering a better consumer experience and building on a thesis that building a better consumer experience, providing them with more control and transparency would really provide benefits to the lenders. We came to market with this experience and with a really message that I think.

Was very visceral and resonated with a lot of the market about focusing on the consumer. You know, certainly as the the industry shifted towards a refi focus, that focus on the consumer itself kind of waned. And the primary focus for most of these lenders over the past two to three years has been how do I manage this capacity? I've got more leads than I can handle and while some may argue that it's been a boon for digital adoption, I don't necessarily think it's been a boon for the consumer experience because.

Tons of people have gotten revised over the last two to three years, but very few of them will say it was a great experience. I think the industry underinvested to a certain degree on customer experience. As you see the industry shift back to a focus on purchase, I expect it to be once again.

Focused on delivering a better customer experience and providing them, particularly in a purchase market, which as we all know is much more complex of a transaction, providing them with much more transparency, but then also predictability on not just the mortgage experience but the other work streams that comprise the home buying journey. You mentioned transactional, right? Refinance is very transactional. There's a start date and for the most part an end date. You're not reliant on a lot of the other stuff that kind of does it right, but from a purchase standpoint.

You're potentially dealing with somebody who went out, they want to get preapproved. They have not found a house yet. That relationship that you have to hold on to is now elongated by months, potentially even a full year depending on how long that that bar. So how do you like what should lenders be doing to keep that that captivation? I mean experience is one thing, right? But how do you keep someone that's come to you to look for a house financing for a house and then now take the time to go find that house. Like how does a lender hold on to that there There are a lot of questions. One is as as a bank how do I create a more compelling.

Offer for my customers and whether it's, you know, something near cash or something that is as you know is differentiating so that they have the best shot possible to win when they're bidding competitively. And then if you don't win then as a bank, how am I keeping the customer warm. And I think we're going to see more tools and more investment going into the nurturing of consumers. And also and that that means bringing to bear more more of the real estate agent experience in the process because.

A lot of the market data that consumer relies on in the home buying journey is servicing through the bank and servicing through the real estate agent and it it should be something that they have access to in the the same digital experience. There's also the the need to continue to refresh a lot of the information to keep the application current. There are a lot of natural touch points that can surface in a in a digital experience but certainly needs to surface through the loan officer and the bank.

The loan team as a whole, that's going to be something that I think we're certainly working on and looking at and I think others are going to be as well. We're also seeing too that augmentation of kind of product opportunities, refinance, you put them in a box, I hate to say it so bluntly like that. When you're dealing with the purchase market though, you have to find ways to expand the different kind of product. So we're seeing people like doing stuff off of crypto.

You see a lot more asset based kind of lending type stuff which kind of requires you guys to augment the way you guys support it too. I'm assuming on that front end you've got to be able to capture that. I don't have the assets, but I do have these other kind of alternative sources and not actually make down payments. So, right, it's gonna be tough and so you're seeing this purchase boom come in or sorry the switch to purchase in.

The purchase environment come into play while the FHFA and the regulators are really focused on improving access to homes and home affordability to underserve markets. That's going to result in more of a focus on non QM loans and how do you underwrite an on QM loan differently than a QM loan? What what do you do differently with income? What do you do differently with assets? How exotic can you get and what sort of experience do you use to drive that? You know a lot of this are, these are manufacturing lines.

You know 60 to 70% of the product that's manufactured in this industry is a single product. Everyone's trying to manufacture it a different way, but as you you move into non QM, you're going to have to think about how to manufacture these differently. If I were to step back and think about what we've done over the last 10 years, the focus has been to digitize that end to end home home lending journey for the consumer and for the loan officer. And what it's allowed us to do is visualize what that looks like with really robust integrations with ICE and Compass.

And what it looks like is pretty ugly. It's it's basically a lot of back and forth over the course of a you know a purchase transaction or refi transaction and it's it's anything but straight through processing creates a lot of the frustration, a lot of the inefficiency and it's because it is not a streamlined manufacturing process. So our our goal in our partnership with with Encompass in in ICE is really to deliver as complete and pristine a loan application loan package into the Los.

To drive a very straight through manufacturing process. So thinking about it in the context of non QM loans, I think it's an opportunity for the industry to just be a lot more thoughtful about how you build manufacturing process to leverage data upfront to have more of a data-driven manufacturing process. The front end of the process is obviously going down its journey, right. You have all the different asset aggregators, the income aggregators out there kind of feeding to your point kind of the data elements that kind of drive that front end of the process and.

That loan comes in, you now have to manufacture it using Encompass or whatever Los you might be on. And the thing that's always been kind of out there like I I remember being on an E close project and just driving some of the E close initiatives through our wholesale channel at that time was 20 years ago. We got very little adoption right. And this is not a new concept but yet not to burn COVID, but that kind of has been a catalyst to kind of advance them as E closing piece. Because you're right,

it's one thing to have the front end digital experience take those that data and drive it into the loan manufacturing process. But then if you disconnect it and have like a traditional kind of paper closing.

You're kind of losing the benefit of all that digital aspect on the front end piece of it. So we totally agree that if you push that all the way through and you take those digital aspects to the manufacturing point and now you introduce an E closing portion of it. Now you are us, the technology partners together are now holding on to both of those. We'll call them the bookends of the process. So what what's been like your journey to the E close side of things. I know that's one of the reasons why you know we've got a partnership going and so on it's been as in 2020.

Everyone had their customers approach them to right, right out of the gate with COVID to see how they get fast. Tracky closing six months later, very frankly, a lot of that interest waned. They realized that there's a lot of thinking involved and a lot of organizational change management required that was difficult to be able to enable or roll out in the midst of this delusion volume. The question really is how do you remove the thinking for.

An individual loan officer, a processor underwriter about whether or not he closes available or how to use the the experience. And so I honestly think the the the approach of being able to support something that is wet sign and and minimum being able to to track it alongside hybrid alongside pure digital. It's what you're starting to do is just you change the behavior to drive the end to end process regardless.

Through the platform and then as you as you see adoption proliferate and you see more counties accept then it's going to be more intuitive to be able to enable it. Do you see that change management asset both internally within an organization to drive an equals adoption and then you obviously have the bar where change adoption right. So I always use that the old Thanksgiving dinner.

Example, right, Coming to my house, Thanksgiving dinner, my brother would probably do any clothes. My dad would never do it to save his life. So how do you balance out like those things and bring in the guys like my dad who would never ever do it into the century. And I think Kovat helped with that a little bit. Like what are some of the things that lenders should be doing to help drive some that change management both internally and externally to some of those consumers that may articulation of the the benefits. It really needs to be telegraphed much earlier in the process.

So that they understand very early on that if they do this, they will be able to close more quickly, more conveniently, and they'll have an opportunity to have more control over it as well. I happen to think that is sitting down at the end of the process with a huge set of documents that you haven't seen before that you might have gotten 3 days in advance but didn't read.

It's very difficult to consume. It actually creates more anxiety. Not everyone else would necessarily agree with that, but it is, again, just managing expectations earlier in the process. Yeah. Do you think that we have enough momentum in the E close process now that?

Continue to see adoption or you think we're kind of plateau for a bit. And then so I I think we have momentum but we need to still get, we still get not just by promoting what what's already there but by building on it. One of the really important things that we we intend to do is just build more intelligence around it. So if we know for example a certain loan type or subject property type based on location is eligible for eclosing for a certain type of home buyer.

That's important to know right out of the gate. It may determine what type of loan product you get. It may determine what you put into your purchase contract. So actual use case is a person who knows they're gonna be out of town when the close of escrow is scheduled, and if they have the opportunity to do any close, they can actually.

Be out of town and keep a more aggressive close of escrow, whereas if they have to do a hybrid close or a wet close, then they've got to push out the close of escrow date and they're therefore less competitive. That's happening quite a bit, actually. That's the sort of thing that.

People will value and it'll put a premium on the E close experience that right now it's kind of coming up at the end of the process and they don't understand the value as much. So what we talked about with ICE about the value of shrinking the closing time frame and reducing the number of documents actually wet sign versus electronically signed, these are all it's important to emphasize what it means in terms of speed and transparency and control.

Benefiting the consumer at the end of the day. So even though a purchase transaction tends to be longer, you still want to knock down as much friction points on that front end of the process. That way they're just kind of working through their purchase and trying to find a place, right. But then you also don't want to introduce any more on the closing side of it. So if you can knock out the friction points on well the bookends and then ultimately automate that loan manufacturing process. Now you're working on where the customer wants to be met.

And you're dealing with their requirements and their ability to go find a house and close on it versus like putting these impediments kind of in between. But if you start breaking it apart and supporting it in one area, you may introduce friction points on that latter half of the process which may not need to be there. I don't understand yet totally that the value of understanding eligibility, but that is something that my sense is.

If we are able to understand eligibility earlier in the process, it's it's going to benefit a lot of different parties, not just the consumer which we just talked through, but also the lender and the settlement team as well in terms of organizing resources and being able to move more quickly on things too. So I know you don't have a crystal ball, but if you did, what do you see the next 12 to 18 months look like for this industry like we're use like we're where the investments, what are people doing. I think we're going to see more investments certainly in everything related to margin retention.

Margin expansion for us that's a lot of what we've rolled out around document intelligence and you know partnering you know with with you guys on both the bidirectional integration and then you know potentially with the IQ as well and really getting at being able to just improve processor productivity and reduce the the overall processor cost on. I think it's funny like last year, the year before was all about capacity, now it's about retaining, how do I hold on to what do I have, how do I keep.

How do I win that customer throughout that entire and the investments are gonna made around those particular areas which arguably is yeah the customer experience through the entire attorney not just kind of been that. Yeah. What do you think about ICE experience so far it's great great conference. I had the unique I guess privilege to attend the executive Summit which was fantastic. Oh yeah, that's right. It was awesome and you got to meet a lot of the ICE executive team, Jeff and Ben Jackson also great and a great reinforcement of the ICE team about their excitement and you know continued investment of into the.

The mortgage technology group and and how they see it fit into the larger ICE system, it's great. They they talked earlier about how ICE is a company that's really focused on connecting people and opportunities and connecting to opportunity and and with the mortgage technology group helping people getting into their the home that works for them and just bring them closer to the American dream. And I think there's it, it makes sense, it makes sense. I'm excited about it's been, it's been a fun journey the last couple years for sure. So it's been fun.

Rajesh, this has been great. Eric, I appreciate it. Thank you very much. Always a pleasure, brother. Of course, it's been good. For those of you listening. We appreciate you guys taking the time and appreciate it now. It's been a lot of fun. Thank you. Thank you.


Information contained in this audio was obtained in part from publicly sources and not independently verified. Neither ICE Mortgage Technology nor its affiliates, make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.

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