REQUIRED READING: The Consumer Financial Protection Bureau (CFPB) has made the plight of borrowers a more important consideration for lenders making technology investments. In the past, the primary focus for regulators has been on enforcing the law. Today, however, the CFPB has made customer satisfaction one metric it will use to determine whether our industry is fulfilling its obligations to consumers.
The CFPB has taken steps on its website and through its social media efforts to make it simple for borrowers to lodge complaints against their lender. This is a significant change that impacts all lenders and mortgage technology vendors.
Traditionally, customer satisfaction has not been the most important metric for the mortgage lending industry. It's not that the nation's best lenders do not care about the experience itself, but other considerations have been deemed even more important. The legality of the work, the ability to accurately measure risk, and the ability to provide the funds the borrower needed to close a real estate transaction in a fully compliant manner have been the primary measures of industry success. When judged by those metrics, the industry has performed very well throughout its history.
But not everyone judges by those metrics. J.D. Power & Associates routinely surveys different industries in an effort to judge companies on their ability to deliver high levels of customer service and satisfaction. In those contests, mortgage banking has consistently lagged behind other industries.
There are a number of reasons for this. For starters, mortgage banking is not a business where the customer is pampered and made to feel like royalty. Instead, each partner involved with the transaction is weighed and measured, carefully judged against a set of metrics designed to accurately measure the transaction's true risk so that the pricing can be adjusted accordingly.
Also, mortgage banking is not based on the perception that the customer is always right. Add to this the number of different business partners that must come together to manufacture a mortgage loan, and a morass of overlapping responsibilities quickly develops – often at the expense of basic quality customer service.
Ultimately, it can be difficult to know which entity has ownership of the deal at any given time. Nonetheless, the CFPB has made the lender responsible for actions of third parties involved in the loan, including even the training they provide their employees. And the CFPB has made it clear that the public will have ample opportunity to express their opinions about how well lenders are living up to their responsibilities.
This is unfortunate for the industry. Just as competition for eligible borrowers is heating up, the industry's chief regulator has made it easy for any borrower who does not qualify for a loan to file a complaint. Also, those borrowers who qualify will be in a position to expect more from their lenders because they know CFPB is watching, and are likely to do so.
Make it better
Fortunately, the industry has the ability to make things better. Let's consider the five distinct areas where the borrower's experience can be improved.
Providing a consistent point of contact. Federal regulators have already settled on this as a necessity – at least on the servicing side of the business, where single point of contact requirements are now in place. These requirements allow any loan borrower to reach out to a single person in the servicing shop for help or support.
Many lenders have discovered consumers appreciate when a financial institution integrates information systems, allowing them access to a range of banking activities with a single log-on. Offering the same look and feel across departments makes it easier to cross-sell.
Even within the same department, offering consumers a consistent process for interacting with different types of documents increases customer satisfaction. Finally, the financial institution can provide a secure method for messaging between the consumer and the lender, which can be easily accomplished through a technology-based portal.
Providing fast and accurate document viewing. Borrowers will not feel comfortable or enjoy the loan origination experience if they do not have the opportunity to build up a level of trust in their lender. The best way to do this is by providing documents to the borrower as quickly as possible while ensuring secure access. This provides a level of transparency that will give borrowers confidence in their choice of lender.
Many institutions are putting all of the documents the borrower needs to review directly into an online portal and then training their employees to ensure that only current documents are available, thus eliminating the risk that the borrower will review an outdated document such as a previous version of a disclosure. Avoiding mistakes here will smooth the transition to the closing table and improve the borrower's overall experience.
Providing up-to-date status information. One complaint borrowers have with the industry relates to the lack of timely status updates during the lending process. By providing real-time status updates and notifications between loan processors and borrowers through a secure portal, borrowers know exactly what's happening on their loans.
A portal can send email alerts out to borrowers, which then drives the borrowers back to retrieve the information. Borrowers want to know the status of their pending loan applications and will log in to a portal frequently to get that information without being prompted by their lender.
Providing integrated electronic signature capability. Lenders intent on improving the borrower experience are leveraging portals to make it easier for borrowers to provide information the lenders need to move the loan forward. Often, signed documents are required, and portals with electronic signature capabilities make this easier for borrowers. Current technologies allow for package consent, multiple signers, signing and initialing, and other lender or investor requirements.
When a lender requests faxes of supporting documentation, borrowers can use the portal to print fax cover pages, making it possible to automatically route the documents from the lender's incoming fax directly back into the portal.
Providing access anywhere. Today's consumers are on the move, and they expect to do business from wherever they are. This requires technology that will grant borrowers access anywhere they can find an Internet connection.
Borrower portals can turn computers, tablet computers and smartphones into offices with all the power borrowers need to keep their loan moving toward the closing table. Not all borrowers are that advanced, of course – there are still some who want to choose how they receive and review their documents, whether that be electronically or having them printed out and mailed to them. By making all of the options available, lenders are more likely to satisfy their borrowers during the loan origination process.
The technology to improve the customer service experience is available today. Many lenders are already utilizing these tools in some capacity – but more lenders need to get on board if the industry is going to rehabilitate its customer service image.
Andy Crisenbery is vice president of professional services at eLynx, headquartered in Cincinnati. He can be reached at acrisenbery@elynx.com.
