Since the start of the coronavirus pandemic, mortgage originators have increasingly turned to digital options to help manage the huge surge in demand for purchase and refinance mortgage applications amid historically low interest rates.
Midway through the final quarter of 2020, and peering into 2021 and beyond, one lesson from the pandemic is clear: Waiting until market disruption thrusts digital change upon your organization is a surefire way to risk falling behind the competition.
The current rise in digital capabilities is in large part due to social-distancing mandates that remain in place throughout many parts of the country. Many consumers are unable or unwilling to meet with an originator in person, undoubtedly feeling more comfortable submitting a loan application or closing on a mortgage from the safety of their home. This sentiment will likely continue for the foreseeable future, maybe even beyond the current pandemic.
Although financial institutions’ pandemic-related shifts to digital have demonstrated a broader commitment throughout the mortgage industry, the reality is that lending has been experiencing a slow but steady movement in this direction. As early adopters know firsthand, the digital mortgage shift also aligns with ongoing changes in consumer expectations.
Consumers have become accustomed to using their mobile phone or computer when shopping for many other goods and services. Consider the successes of Amazon, Netflix and Apple. People want to be able to do things quickly, remotely and seamlessly. So, it is no surprise that they also would expect to accomplish tasks such as remote notarizations, account openings and closing processes via online channels.
This trend was evident long before the pandemic changed so much of daily life. And it will certainly only continue along this line going forward, especially among younger and older millennials (individuals born between 1980 and 1998).
Millennials make up the largest share of U.S. homebuyers at 38%, according to the National Association of Realtors’ 2020 Generational Trends Report. They are expected to account for more than half of all mortgage originations this year, according to Realtor.com’s 2020 housing forecast. Aligning with this soon-to-be majority population may make the difference between an originator’s future success and rapid irrelevance.
Even with increased digitization, it is vitally important that mortgage originators maintain a physical connection and do all they can to engage consumers in the way they want to be served. Today’s economic environment demands optionality and agility, and an omnichannel approach is critical.
Although an increasing number of people are applying for accounts online, many stop midway through because the form is complicated or confusing. That’s when your lending team can truly step up by providing personalized service and trusted financial guidance. The human touch — either by text, email, chat or phone — makes a big difference, especially when a client feels stuck at some point in the application process.
Even borrowers who say they prefer text or email updates are happiest when they get a personal phone call from the originator (with a net promoter score of 89) or the processor (with a score of 88), according to 2019 Stratmor Group survey data. Clients receiving email and text up-dates score the process much lower, with scores of 76 and 78, respectively, according to Stratmor. (Net promoter scores are a way of gauging a client’s loyalty to a company and, in this case, is measured on a 100-point scale.)
The goal is to meet consumers where they are. For some, that can be achieved exclusively through digital methods. For many consumers, however, superior service is best realized through a combination of digital and human touchpoints. The best digital choices offer originators the flexibility to be both human and interconnected.
This is a challenging yet exciting time to be a mortgage originator. Business is brisk and consumer demand is high. Adoption of (and improvements to) technology should continue unabated in the months and years ahead.
Mortgage originators can differentiate themselves by implementing dynamic digital capabilities that help them deliver more consumer-friendly products and services. An adaptable digital platform gives originators the agility they need to deliver a superior consumer experience and thrive in a highly competitive, constantly changing market.
An intelligent platform delivers more closed loans, reduces costs and eliminates paper-heavy processes. It provides guidance for borrowers and a suite of integrated lending tools designed to supercharge originators. Unlike a single-point solution that is limited in scope, it connects borrowers, loan teams, settlement agents and real estate agents on a single dynamic platform.
A flexible digital platform supports an organization’s growth as it matures and helps originators build long-term partnerships. By enabling individualized service from the moment applicants begin their financial journey, it helps financial institutions serve consumers along each step of their lifelong financial journey. Forward-thinking providers are already doing just this, leveraging the powerful capabilities of a digital platform to help them navigate the future while delivering a fast, frictionless and safe client experience.
By replacing cumbersome and inefficient processes with modern digital tools, providing personalized financial guidance and meeting each client in the manner they want to be engaged, originators can set themselves up for continued success. This is true not only for today and tomorrow but for five, 10 and 20 years down the road. ●