Look back at the past 10 years and you’ll see countless ways that technology has changed our lives. In 2010, you couldn’t order groceries on your phone and have them delivered to your home. Nobody knew what a Snapchat was and Alexa was just a person’s name. The world of technology has come a long way over the past decade and that’s especially true in the mortgage industry.
Ten years ago, a mortgage originator still had to drive to a borrower’s house or FedEx a package to them. Can you imagine doing that today? In 2019, originators can take a borrower from application to the closing table without ever meeting in person, picking up a pen or printing a piece of paper. A fully digital mortgage experience is here, and it can save everyone involved in the loan transaction time and money.
Mortgage originators should understand how much and how quickly technology has evolved. In particular, independent brokers should realize how this digital revolution can benefit them and their business — both now and into the future.
“ A fully digital mortgage experience is here, and it can save everyone involved in the loan transaction time and money ”
In 2010, mortgage technology essentially amounted to keeping systems running as fast as possible for the processing of loans. Only a small percentage of originators were using any type of technology to manage their pipeline.
Customer relationship management (CRM) resources existed, but they required a lot of heavy lifting on the part of the originator. On top of that, everything was done in person. On a visit to a borrower’s home, for example, the originator may have brought their laptop along, but they couldn’t really do anything with it — that had to wait until they got back to the office.
From an enterprise-technology standpoint, the emphasis earlier in the decade was on giving borrowers a way to fill out their own online application. An originator could attempt to create their own website and then try to get clients to visit that site.
When a borrower had to fill out their 1003 mortgage application, however, it was still a very time-consuming process. People in the industry were looking for what we now call “the digital transformation.” The only problem was, the technology wasn’t really there to get close to it. A few companies were trying to figure out how to make the online borrower experience better, but that was about it.
Nobody thought about efficiencies in the system and nobody had their own loan origination system. Originators were reliant on older platforms, which weren’t easy to modify. You either couldn’t do it or you had to wait for the vendor to add your idea to their next technology build-out, which often took months or longer.
Eventually, mortgage technology started to catch up. Some lenders decided to start building their own software because they knew that would make them more agile, which would help originators adjust to borrower needs. Nobody had a true understanding of what that meant because it was still incredibly difficult to build a loan origination system.
So, mortgage companies still relied on third-party vendors to do that. Around 2012 to 2013, the industry’s technology focus shifted to client retention and how companies could attract or retain their top salespeople. This was a smart move and paved the way for all of the tools yet to come.
“ Even if you’re on your own as a broker, you can act like one of the big players because of all the technology you have access to through your wholesale lending partners. ”
Leveling the field
It became more important for mortgage lenders to understand how to make an originator’s job easier and then have the capacity to build it. How can you make it easy for them to not only get leads, but when they get those leads, to have all of the information they need at their fingertips? Better yet, how can you tell an originator everything about a possible lead so it automatically gets pushed to them and they know they should reach out?
Lenders started to shift their attention to business intelligence and data. In the mortgage industry, all of the data was already there, so the mission became about turning as much of that data as possible into useful information.
That was the true turning point for mortgage technology — being able to mine data properly and use it with the knowledge that consumers are going to look at interest rate trends, become potential clients in your pipeline and your system will preemptively tell you to call those people. This is when the playing field started to level for independent mortgage brokers, a field which is now tilting more and more in their favor.
The biggest differentiator for independent brokers is working with wholesale lenders who are nimble and don’t rely on third-party vendors. These lenders can build technology quickly and make adjustments just as fast, giving brokers the upper hand over retail originators who are bound by the tools their company gives them.
Even if you’re on your own as a broker, you can act like one of the big players because of all the technology you have access to through your wholesale lending partners. When you’re independent and you’re in control of the tools you use, it’s a whole different ballgame. That is the real digital transformation. Technology advanced to the point where any originator could be successful if they simply knew which tools existed, how to get them and how to use them.
The successful partnership between brokers and wholesale lenders relies heavily on communication. As an originator, it gives you a huge competitive advantage when you work with lenders who not only want feedback on their processes and systems, but can take that feedback and quickly make changes. Forward-thinking lenders are always listening to their clients for new and innovative ways to make the loan process faster and more efficient. This has altered the technology landscape for the entire mortgage industry.
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Looking ahead to 2020 and beyond, there’s no question that technology will continue to drive the industry forward. Successful mortgage originators are always selling and building referral sources because technology allows them to spend more time on those things and less time crunching numbers.
Originators need to think about what they can do for their borrowers that no one else can do. They need to think about how they can get in front of borrowers faster than anybody else. That’s all about technology. Those who embrace the digital transformation will continue to evolve and grow along with the tools that allow them to do so.