Adam Stern: Lenders Need Technology That Increases Margins During Low-Volume Periods


PERSON OF THE WEEK: As mortgage technology continues to advance in 2023, it is becoming increasingly important for lenders to adopt solutions that increase profit margins during periods of low volume. 

To learn more about the different technologies that are currently driving the mortgage industry, MortgageOrb recently interviewed Adam Stern, chief technology and product officer at Docutech, a First American Company.

Q: What are the current technology trends in the mortgage industry?

Stern: We expect to continue to see the trends in the broader technology world start to infuse into the mortgage industry. With the current market environment, there is an even greater need for advancing process digitization, introduction of AI, and continuing the trend towards overall automation – all in an effort to lower cost, improve scalability and increase overall quality.

One area where digitization becoming the broad standard is e-closing – where fully digital closings through remote online notarization (RON) and in-person electronic notarization (IPEN) become more of the standard with hybrid e-close the secondary option. Consumers are becoming more acclimated to digital transactions as a part of daily life – and digital closings create an even simpler, faster and more convenient closing process. For the lender, a complete end-to-end digital mortgage accelerates the process and eliminates manual, error-prone work that drives up production costs.

Together, all this technology and automation helps lenders refocus their human talent (and time) on higher-value activities and improving the overall customer experience.

Q: What do you say to mortgage leaders who are wary of change?

Stern: All change can be difficult – especially in a complex industry such as mortgage where the entrenched processes don’t necessarily seem “broken.” However, the last several years have shown us that – when truly necessary – change is possible at a faster pace than we thought possible. Integration of new technologies into the processes will continue to be necessary to compete in a tougher market where customer expectations around experience (digital and otherwise) continue to increase.

Mortgage lenders should ensure that they have trusted and experienced technology partners who are able to lead them through this change, providing support and vest practices. It is incumbent upon technology companies to solve challenges for clients and change management is one of those.

Q: How has the increased popularity of e-closing technology affected the mortgage process?

Stern: E-closing technologies are just the latest steps of the overall industry, lenders and their customers all working to embrace a more efficient digitized process – and the value for everyone in the process. Borrowers are able to close more quickly and conveniently without ever leaving their home; settlement agents don’t have stacks of paper to print, scan, and mail out (hopefully without any missing signatures or initials); and lenders get the fully executed, tamper-sealed documents instantaneously (without risks of trailing doc issues) to drive cost gains in the post-closing and secondary processes.  As an industry, we need to continue to reimagine the origination process to truly realize the benefits of full digital lending.

Q: How can mortgage lenders ensure they are on the same page as their customers when it comes to digitizing their experience?

Stern: Lenders must keep in mind the general practices of their borrowers. It is not just mortgage processes that are going digital, it is everything. From digital banking to ordering groceries, having digital control over every aspect of life is the standard in 2023 – and providing mortgage solutions should not be any different. Consumers expect to have a technology-enabled experience that is paired with the human touch when they want it.

Q: For lenders, what are the quantifiable benefits of utilizing mortgage technology?

Stern: As rates are projected to continue to rise in 2023 and loan volumes decrease, lenders are looking for ways to stay competitive and offer attractive solutions and experiences for their customers and their internal teams. Mortgage technology can help streamline the entire mortgage process, starting with simplifying mortgage applications and then working through each subsequent step or component, to reduce time to close, minimize data entry, improve quality, scalability and experience.

The closing process is one of the easier areas to make entirely digital e-closings drive efficiencies and offer potential for large cost savings. This is due to less manual work, fewer expenses (including paper, physical storage, shipping, etc.), increased accuracy, reduced rework and ultimately, faster funding and loan sale. There is extreme value in being able to sell loans faster with e-notes, keeping the loan cycle going allows for more consistent funds.

Digital signatures, electronic notarization and e-notes, when leveraged, offer a fully digital closing allowing lenders to realize gain on sale due to speed of delivery as well as savings on hard costs like mail, manual post-closing processes and reduced rework.

Data from e-notes can be easily retrieved, resulting in better data quality and reducing “stare and compare” type processes throughout the closing and post-closing processes. There are also other benefits such as the ability to attract and retain talent due to a modern, technology-enabled experience or the value provided to lead sources like real estate agents, settlement agents, attorneys and others by offering their customers a fast, easy, digital solution.

Notify of
Inline Feedbacks
View all comments