Speed, personalization drive mortgage technology advances
Consumers expect an 'almost instantaneous' mortgage process.
We've all heard the expression "elevator pitch," a popular term used to describe a quick, incisive summary of an idea over the course of a 30-second elevator ride. Ideally, it's so focused and succinct that the listener emerges from the ride with a clear idea of the concept a fellow passenger has been touting.
For credit unions, Rocket Mortgage may be the equivalent of an elevator summary. While credit union mortgages are far more consumer-friendly from a rate and fee standpoint, Rocket Mortgage has thrived by focusing on ease and efficiency.
"One of the most common requests we get from credit unions is, 'How do we get a Rocket Mortgage of our own?'" says Tonya Coon, executive vice president of operations at myCUmortgage, a credit union service organization (CUSO) that that provides mortgage solutions to credit unions. "To answer that, we need fast, user-friendly technology that delivers a branded mortgage application process to our credit union clients."
"Rocket Mortgage and Quicken have gotten into the psyche of Americans by selling them on the idea—and expectation—that the mortgage process is almost instantaneous," adds Stephen Hewins, senior vice president at CU Members Mortgage.
"We probably should thank them for that," he says. "That kind of marketing has actually made it easier for credit unions, which thrive on member loyalty, to reach out to members and offer as much speed and ease of use as the most up-to-date mortgage processing."
‘Current technology puts a human face to an otherwise automated process.’
The key, says Hewins, is to find a third-party partner that can offer technology that allows credit unions to compete with well-funded providers such as Rocket Mortgage. "They don't have to be mass marketers like Rocket to compete with it."
"The biggest recent tech development around mortgage lending is enhancing members' experience to the point that they will keep coming back to a credit union for all of their financial affairs," says Joe Dahleen, executive vice president and chief strategy officer at MortgageHippo.
For credit unions, that means investing in modern mortgage technology that allows them to compete with Rocket and similar online mortgage providers, he adds.
Accessible, high-tech modernization
"Over the past 12 to 24 months we've seen an intense focus on an enhanced user experience for the mortgage borrower,” Coon says. “This includes 'responsive design,' which provides easy-to-use mortgage applications."
Many technological features—such as mobile devices, paperless processing, and instant access to required mortgage application documentation—haven’t always been available in the mortgage industry, but are now making an impact, Hewins says.
"One element of that quickness is 'Day 1 Certainty,' where if you use certain verification services you can quickly acquire an applicant's financial information,” he says.
Automated income method—or AIM—is big, Dahleen agrees. It has the ability to gather all relevant documents, such as pay stubs, credit reports, current loans, and even identity verification.
‘The biggest recent tech development around mortgage lending is enhancing members’ experience.’
“It also has a built-in ACH capability so members can pay fees online, which accelerates the processing of their loans,” he says. “This considerably eases the process for borrowers."
"We are seeing the digitization of loan files, where it's possible to complete almost the entire process without the use of paper," Hewins says. Digitization also allows rules engines to gauge the likelihood of repayment, he adds.
“Current technology puts a human face to an otherwise automated process,” Hewins says. “We can use Skype to set up meetings that involve the real estate agent, family members, and other parties involved in the loan, as well as interpreters.
“In states that only require notaries to finish the application process, credit unions can offer 'roving notaries,' who will meet members at, say, a local Starbucks, to sign off on final documents," he continues.
Transparency also is vital to successful member interactions. Dahleen says Mortgage Hippo's loan dashboard was its "first foray into creating a transparent process for members who are applying for a mortgage loan. They can clearly see every step. It has also eliminated filling out long forms before even entering the origination process because it can quickly direct applicants to the best loan terms for their particular situation and need."
When developing digital mortgages, credit unions must take into consideration their strategic goals.
"When we asked [executives] at one of our credit union partners to tell us what they saw as the most important feature in a digital mortgage application, we received three different answers,” Dahleen says. “One said focus on the portal, another said focus on the closing, and a third said focus on every process in between."
He suggests considering three goals when designing a mortgage loan process:
- Enhance members' experience.
- Reduce costs and touch points.
- Reduce the time it takes to apply for a loan and receive an answer.
"We're in the background," Coon says, "providing credit union clients with easy-to-use origination processes while also providing behind-the-scenes mortgage servicing.”
Next week: The ‘millennial effect’ and what’s next for mortgage software