As mortgage lenders struggle to keep pace with the growing wave of refinancing and buying activity driven by historically low interest rates, technology is assuming unprecedented importance.
Before the pandemic, many lenders were interested in a more digitized mortgage process – they recognized that technology could help them close loans faster, increase operational efficiency and margins, and improve the lending experience. ‘borrower. Current economic and market conditions have accelerated the need for these automated solutions. These digital solutions are quickly becoming table stakes in the increasingly competitive mortgage market.
The best technology mortgage services go far beyond mobile and online apps to include digital valuation, title and closing services. While much of the industry currently allows consumers to apply for mortgages electronically, subsequent activity is often taken offline and in a more traditional and time-consuming process. While this may have been acceptable to homebuyers back in the days when it was the only game in town, consumers expect more advanced options today. They seek a fast, easy and fluid experience that meets their needs while respecting their personal space.
Social distancing guidelines have created a need for virtual closures. Even before the emergence of COVID-19, consumers expressed a desire for electronic shutdown. A recent survey by Javelin Strategy and Research at the behest of ServiceLink found that one of the main consumer complaints about the mortgage process was the number of physical forms that must be signed at close.
The investigation also revealed that:
- 89 percent of consumers agreed that electronic signatures are easy and convenient
- 88% agreed that electronic signatures save time on important transactions like getting a mortgage
- 79 percent expressed interest in using electronic signatures specifically for mortgage loan applications
This interest in electronic signatures has turned into a real demand for virtual closures, social distancing having become our reality.
As millennials emerge as the primary mortgage market, expectations for speed, control and transparency continue to rise. Millennials have taken control of virtually every aspect of their lives through technology; they expect no less from their mortgage experience.
“Consumers are seeing how other industries are using technology to dramatically simplify the shopping experience, even for big ticket items,” says Kiran vattem, Executive Vice President and Chief Digital Officer at ServiceLink. “In the market for a Tesla? You can customize, order and finance your car, and have it delivered to your home within three weeks. Or pick one from inventory and get it in four days. Consumers want buying or refinancing a home just as quick and painless.
The sheer volume of refinances and purchases places a high demand on lenders. As activity increases, mortgage lenders are racing against time to lock in buyers and process their loans.
Fortunately for lenders, they don’t have to invest huge amounts of financial or human capital in developing and implementing the technology to get up to speed quickly. Technology-driven settlement services partners specialize in digital mortgage solutions that remove hassle and friction for consumers.
For example, consumer planning technology automates appraisal and closing processes to reduce days in the loan cycle while providing convenience and transparency to the borrower. Where appraisers and closing agents previously spent days emailing or playing on the phone with homebuyers or their agents to schedule appointments, easy-to-use apps now allow the borrower choose from available agents, dates and times, and schedule appointments immediately. The time of assessors and closing officers can also be allocated more efficiently.
Virtual home inspections also offer a cutting edge opportunity for digitization and modernization. Lenders can use self-inspection apps, which in some cases include geolocation and coin identification to prevent fraud, to streamline a variety of loan and service processes, including equity loans. and portfolio management.
Some closure requests also include a virtual signature to address social distancing issues. The agent and the borrower meet in a video session and use remote online notarization in which the borrower electronically signs and the notary electronically notarizes the closing documents.
Lenders have a huge opportunity to operate more efficiently and cost effectively, and to create a differentiated consumer experience by fully digitizing their mortgage process. The key is to identify a settlement service partner with solutions that meet customer needs and improve mortgage delivery.