Mortgage is often a scary word for many. Anybody who has taken out a mortgage will vouch for the fact that the pain points are many from humongous paper work, mis-routed mails, lost documents, frequent re-submissions and endless waiting and negotiations. An expert study found that a regular mortgage application involved a staggering 500 pages of documentation. This, coupled with the painstakingly slow pace of approvals, can be really frustrating.
Technology is changing the face of mortgage, making it more open and people-friendly. Digital mortgages are in vogue and cloud-based mortgage solutions and mobility enterprises will be the game changers this decade. However, lenders have been concentrating on the initial loan origination process without going all-out digital. Focus is on loan origination software, which can speed up documentation and empower loan officers to make decisions. The compliance aspect is also looked after very well.
But a streamlined loan origination process is not of much help by itself, especially if customer experience is not taken into account. The current experience is very disjointed with certain processes like approvals better managed than others. This is a huge opportunity for lenders to deliver an end-to-end digital mortgage to customers.
Automated loan origination is gaining acceptance
Loan origination solutions have been well accepted by lenders and today, the focus should be on delivering an empowering customer experience. Mortgage has already gone digital with customers comparing and contrasting mortgage solutions on the internet. Lenders should be able to augment this process by increasing the visibility of loan origination for the customer. This takes customer relationships to the next level with constant engagement and client centricity.
Lenders have been preoccupied with compliance and new regulations and neglected innovation in customer relationship management. The mortgage process needs to be customer friendly to make business more sustainable for bankers. New innovations like digital pre-qualification letters, digitized documents, mobile solutions, and e-signatures have caused an industry-wide change. As loan officers and advisers become available online with instant solutions, the mortgage process is not looked upon with fear.
Digitization does not mean that the entire mortgage process happens through a voice machine. Customers continue to rely on relationships with loan officers. Mortgage is still a significant financial decision and expert advice is always valuable. A digital space coupled with expert interaction with a loan officer is likely to be the most ideal system.
But experts are skeptical about end-to-end digital processing. Customers come well-versed about the mortgage solutions and prefer their applications are better managed and instantly processed. Mortgage as a commodity with complete digitization may be a long shot. The mortgage process is still complex and requires a human touch.
The fragmented approach to digitization is not enabling the mortgage value chain. An integrated paperless workflow is missing. Few processes like electronic disclosures and digital documentation have been the saving grace and are still transforming the loan-origination landscape. With loan origination, many lenders have realized efficient work flows, streamlined operation, reduced costs in printing and storage and elimination of delays.
The new industry disruptor
Lenders and technology vendors should continue to innovate to connect the loan origination process with customer relationship management solutions. The concerns of compliance and regulation are slowly being cleared and the future will belong to integrated e-mortgages that will be consumed as an online commodity. The strategic value of the mortgage chain will be realized when paperless processes are linked and a truly end-to-end digital process with focus on customer centricity prevails.
Preethi Vagadia is a business architect worked in Mortgage and Finance software department company Tavant. She has over 8 years of experience in Mortgage Lending Technology, mortgage origination software, mortgage management software, mortgage origination software management etc. She has also worked in several process improvement projects involving multi-national teams for global customers in warranty management and mortgage.