Mortgage industry insights

Meeting Demand on the Digital Mortgage Frontier


With all of the revolutionary changes happening on the digital mortgage frontier, it’s important for us to keep our pulse on the market and understand where lenders are on their journey to delivering a true digital mortgage. I had the opportunity to sit down with Garth Graham, Senior Partner at STRATMOR Group, during the recent MBA’s Spring Conference & Expo to get his take on the impact that advancements in digital mortgage are having on our industry.

Garth has developed a definition for the Digital Mortgage which has two parts:

  1. The ability to interact with the customer across all potential interaction methods (web, text, email, mobile, chat, voice) in the way that they want to interact. It’s important to note, Garth said, that most customers would prefer to interact across multiple methods in a true omni-channel experience.
  2. The ability to generate DATA to support the loan file rather than DOCUMENTS.

This second part of Garth’s definition points out that it’s not just borrowers who benefit from digital mortgage technology. Lenders will gain a myriad of benefits as well. Until recently, we looked at data on one screen, and entered it into a document on the other, which was a time-consuming process that had more opportunity for errors. In fact, Garth joked about one of the biggest advancements in technology for our industry being the dual monitor. However, now we can extract data from documents using automation and skip that translation/data entry step. This utilizes data as the empirical source of truth in the lending process, rather than relying on the documents from which the data is derived. Automated mortgage technology adds a layer of trust and accuracy between the lender and the borrower that has been lacking in the past, as well as increased efficiency and ROI. Maybe the second monitor can be used solely for video conference calls!

Garth’s observations about digital mortgage technology are right in line with data we received through our own research here at ICE Mortgage Technology. We recently surveyed mortgage lenders for our 2020 Borrower and Lender Insights Survey and pinpointed some expectations that lenders have for how digital technology will impact their workflow going forward. As a result of the pandemic, 1 in 4 lenders say their institution is looking to invest in new technology or has already invested in new technology. The vast majority of lenders are expecting automation services to increase efficiency and stimulate growth across the board with:

  • Simpler application process
  • Quicker time to close
  • Reduced data entry
  • Greater flexibility for customers
  • Readily available information
  • Enhanced security
  • Ability to meet remotely

Adopting and building processes around digital mortgage technology will allow lending institutions to meet the needs and expectations of both lenders and borrowers.

These insights from Garth are encouraging for the digitization of the mortgage process, but I couldn’t let him go without addressing the elephant in the room: Will digital mortgage technology render underwriters and other loan processing professionals obsolete? Garth’s answer is that not only will underwriters still be relevant, they will become more essential to the mortgage process than ever.

Garth explained that the automated underwriting process relies on the loan process falling within a predictable path based on the average customer, but there are outliers on that path. Applicants that are self-employed, first-time home buyers, or buyers who are qualifying for some type of specialty loan will need to have their information approved with a human touch.

Specialty loans will also become more common as the market declines, and banks will be looking for an edge in gaining a share of these loans. Digital mortgage technology increases productivity across the board, which means that lenders will be increasing the number of applicants needing to be processed at any given time, including loans that are unique in some way. Experienced underwriters will be a huge value add in the loan process as their expertise will be needed to keep things moving smoothly. The key, Garth said, is to remember to focus on people and processes along with technology when implementing new changes.

Garth concludes by noting that the future of investing for lenders lies in creating the digital experience borrowers want. These digital processes also increase productivity and output potential on the lenders’ end. Garth points out that about 40% of loan officers do about 80% of the work within the industry, and it will be essential for these top producers to use the technology to make themselves even more valuable, and for everyone else to use it to maintain a competitive edge.

Garth’s insights about shifts in the mortgage industry are right in line with the solutions our customers have been seeking. Profound changes are coming, but they don’t have to be scary or disruptive to your business. With ICE Mortgage Technology, you have a guide to navigate the digital mortgage frontier and keep your business relevant and up to date.

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