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Only a few decades ago, it was possible to qualify for a home loan with little more than a firm handshake, a nice smile and your good word. The process was simple, direct and based largely on the personal relationship between mortgage lender and homebuyer.
But what was once a people-first business has gradually morphed into a complex, heavily regulated, process-first business with razor-thin profit margins and steep penalties for non-compliance.
The change accelerated even more dramatically over the past few months as the industry has come to grips with the Know Before You Owe regulations that were enacted last Fall. Modifications to HMDA Regulation C and the Uniform Residential Loan Application are still on the horizon.
New automation technology platforms have helped mortgage lenders keep pace through this industry evolution and ensure loan quality, compliance and efficiency.
Lenders can more easily demonstrate their organizational regulatory compliance during audits and avoid potential penalties and reputational damage associated with non-compliance.
While pockets of the industry were at first resistant to new processes and felt that automation technology was a threat, they have largely come to recognize that it is nearly impossible to meet the stringent and still-changing TRID requirements without it.
But a funny thing also happened while the mortgage process became more automated. Rather than reduce human interaction, which some skeptics anticipated, automation technology is in fact having the opposite effect. It is enabling mortgage lending to become a people-first business once again.
Opening doors for the next generation of homebuyers
In addition to the back-end benefits automation technology delivers, perhaps its most important advantage is that it gets mortgage lenders out from behind their desks and frees up time and energy for them to invest in providing a great customer experience.
Studies have shown that a company’s or brand’s customer experience significantly influences consumers’ purchasing decisions. A great customer experience is especially important to millennials, the next generation of first-time homebuyers who are just beginning to enter the market in a meaningful way.
For instance, in its 2016 Customer Experience Guide, CGS, a global provider of business applications, enterprise learning and outsourcing services, observed that “consumers expect a seamless, cross-channel, real-time experience.”
CGS recommended that companies must become “customer obsessed if they want to keep and gain market share and grow their businesses.”
We know that buying a home is one of the single largest purchases most people will ever make in their lives, which also makes it one of the most stressful experiences people endure. Despite all the technology tools and data at their fingertips, today’s homebuyers want to interact with a trusted advisor who can assure them they are making the right decisions and financial commitments.
The power of open platforms
While mortgage automation technology is no longer in its infancy, there is still much more to be done to fulfill its potential. The next frontier of innovation is in open platforms that have common, documented workflow, business and infrastructure services, and that enable third-party developers to innovate and expand their capabilities.
We have barely scratched the surface potential of mortgage automation technology. The power of the platform extends far beyond streamlining workflows and ensuring proper regulatory compliance, as important as they each are.
The real power of the platform is in helping future generations achieve the American Dream of homeownership and putting people and relationships back in the center of the home buying experience.
