There’s no question that mortgage brokers are facing a changing and challenging business environment. It’s more important than ever to choose a partner who understands these dynamics.
Flagstar Bank is investing in tools, technology and process improvements to deliver efficiency, speed to market and an enhanced customer experience. With enhancements to its pioneering Loantrac LOS, partnerships with industry-leading POS/LOS systems, and an expansion of its non-agency product set, Flagstar Bank aims to make brokers more competitive than ever.
Flagstar’s Heritage is Empowering Brokers
“Having a strong focus on brokers has always been at the core of our mission,” affirms Brian Vieaux, senior vice president, third party originations, at Flagstar.
Focusing on wholesale and retail mortgage clients helped the company, launched in 1987, grow and ultimately evolve into a leading national mortgage originator.
“When you look at the rankings of the top 10 or 15 wholesalers today, there’s probably only two or three that can claim they’ve been doing this for a couple decades, and we’re into our fourth decade,” Vieaux says. “We’ve been through a lot – we’ve seen multiple cycles. And through thick and thin, when others exited the space, we’re still here, and we’re proud of that.
In fact, Flagstar is one of only a few regulated financial institutions that is in the wholesale channel today.
One of the ways Flagstar stays close to the business and its broker customers is to go back to basics with good old-fashioned, face-to-face communication. Listening to its customers’ successes and challenges allows Flagstar to sharpen its focus on improvements to help brokers continue to grow their businesses profitably.
“We get out and sit in front of our customers,” Vieaux says. “We are very committed to having local account executive presence in our relationships because we believe that adds tremendous value. And I also do what I can to be out in the field as often as possible.
“By having our team physically out in front of our customers, we are able to ask better questions,” he says. “That’s how we stay proactive and understand the challenges that brokers are facing. We ask them what’s keeping them up at night, what struggles they are having, and how we can be a better partner.”
Vieaux intends to continue to evolve the local coverage model to leverage what he believes is one of the most tenured and talented account executive teams in the industry.
“Our account executives embody the commitment and heritage of our many decades in the mortgage business,” he says. “Leaning into their experience and enabling them to reach more customers reflect our desire to better serve the growing broker community.”
New Enhancements to Loantrac
One of the insights gained from listening to broker customers pertained to Loantrac. When Flagstar initially developed and released the Loantrac platform, it was a tremendous improvement in process and efficiency for brokers.
As Flagstar spent time one-on-one with customers and continued its practice of soliciting feedback in its annual broker survey, Flagstar realized investing in enhancements could significantly improve the proprietary platform. New features and functionality were piloted in December and will be rolled out to the wider broker community in mid-Q1.
Early in January, Flagstar announced several Loantrac enhancements specific to the closing process. Vieaux believes they will improve speed and make working with the platform more intuitive, especially at the critical inflection point of closing.
“If you think about a mortgage transaction, you can do everything right – from taking the application, through underwriting, to pricing the loan – but if you screw up the closing, the only thing the borrower is going to remember is you screwing up the closing,” he says. “Our goal is to improve the ease of the closing process and have borrowers feel good about it when they get to the end of the transaction.”
Making sure borrowers reflect positively on their experiences is a critical element of the consumer experience. Not only can it make or break a broker’s relationship with their borrower, but it can also impact the broker’s relationship with and perception of their funding partner.
“Having the closing go smoothly is not only a direct reflection on Flagstar; it is a reflection on the broker,” he says. “How we handle the closing process for the broker will determine how likely that broker is to receive repeat or referral business. The way we see it is that the best thing we can do is help brokers look good to consumers, because that’s going to help them win more business. This will help strengthen Flagstar’s relationship with brokers in the process.”
Additionally, Flagstar has enhanced its upfront disclosure process within the platform to streamline application disclosure delivery at one time. This improvement was launched in December and has helped brokers deliver transparency to the borrower while also gaining efficiency.
Vieaux has received very positive feedback on this enhancement, commenting that “it has most definitely improved the overall consumer experience.”
This enhancement combines the TRID disclosures with the broker application disclosures, eliminating the need for the broker to send application disclosures from the system. The borrower is now receiving one set of disclosures and has the ability to e-sign, as well.
Flagstar doesn’t intend to stop innovating and improving the platform.
“We’re pretty much going through our entire loan process,” Vieaux says. “Each module, if you will, is under refinement. So, through the course of this year, we will have updated the entire platform.”
All efforts are geared toward efficiency – to remove redundancy and improve the overall flow of a loan from a broker to Flagstar. Up next are planned adjustments to functionality and improvements to platform user experience.
“By the end of February, we will be launching new enhancements to our up-front price quote, loan registration and rate lock screen,” Vieaux notes.
Arive and Calyx Integrations
Flagstar has always emphasized building partnerships and delivering innovation through third-party technology, dating back to its integration with Calyx. To further its commitment to optimizing broker operational efficiency, Flagstar is now partnering with
Vieaux calls this new, comprehensive platform “more of a broker ‘ecosystem,’ where the broker has a solution for everything from a digital front-end application all the way through to an LOS, which can gather documents and then deliver loan-level data directly to a lender.”
The platform is accessed via a single sign-on for the broker, adding to its ease and efficiency.
Adding further value is the ability to leverage a single data set throughout the platform and process. Data collected through the initial online application and verification process can be automatically applied, all the way through closing. This functionality, combined with the other “ecosystem” components, can greatly streamline the broker’s process and enhance the borrower’s experience.
Flagstar is also expanding its integration with Calyx as part of the NAMB All-In solution.
“Our view on integrations is that we need to be where our customers and the broker community are. We are agnostic to the platforms that our customers operate on and believe that we best serve the broker community by partnering with as many of these systems as possible,” says Vieaux.
Broadening the Product Set
Beyond technology and platforms, Flagstar’s products continue to deliver unmatched flexibility and breadth of offerings. Vieaux believes Flagstar’s banking infrastructure allows it to create products and features others may not be able to match.
“There’s no middleman between Flagstar and the end investor, which allows us to be more competitive – not only with price, but also with guidelines and process because we control the process,” he observes.
This ability to control critical elements of the process has resulted in aggressive jumbo loans, a broad array of construction and renovation loans, HELOCs, and second mortgage options for brokers to craft the right solution for their borrowers’ needs.
Vieaux sees construction and renovation products as a growing opportunity for brokers.
“You can’t flip through your cable channels at any hour of the day and not see a ‘fix-and-flip’ type show on TV,” he says. “And I think consumers have a much better understanding of how property valuations can benefit from renovations when it comes to a purchase transaction. Essentially they can walk into a home that is straight out of the Brady Bunch era and ignore the orange laminate countertops. If they want to be in that area of town but there are only older homes, they can get a loan not only to purchase the property, but also to renovate it. We do a lot of renovation lending, and it’s really been a big help for our brokers, especially in this purchase market. We have a full suite of construction and renovation products available to our brokers.”
If the borrower intends to build rather than renovate, brokers can offer maximum flexibility and efficiency with Flagstar’s popular one-time close construction product.
“This is a loan designed to facilitate the construction of a new home: buy the land, dig the foundation and build a new home – all facilitated with one loan and delivered with one closing,” Vieaux says.
This product adds convenience, streamlines a process that can be challenging for broker and borrower alike, and is also offered in a jumbo version that exceeds the conforming loan limit.
Being a bank and having a balance sheet also allow Flagstar to provide brokers the opportunity to offer second mortgages and HELOCs through their relationship with Flagstar.
“HELOCs are interesting in this particular market,” Vieaux says. “Absent maybe the past 60 days, when rates have gone down, folks generally agree the overall trend is they’re going up. So, if you’re a homeowner and you’re sitting in a 4.5 percent, 4.25 percent, or 3.75 percent rate loan, and you want to tap into your equity, getting a cash-out refinance is an option. But, if you’re going to do that, the prevailing rate today might be something closer to 5 percent.
“If you can tap into your equity with a HELOC and have the flexibility of maybe not tapping into all your equity but doing it over time – now, that’s a product that we can offer brokers to offer to consumers. That particular product launched in late 2018, and it has been doing very well for us,” Vieaux says.
He notes Flagstar is also exploring a non-agency product set available to mortgage brokers through the company.
“There are several investors and lenders out there doing non-agency product sets today, and a lot of them are doing quite well,” he says. “We think what will differentiate us is our tried and true process. So, if we’re able to deliver a non-agency product set combined with our process, we can deliver competitive advantage through speed to market and the ease of use for product, which will be beneficial for the broker.”
All of Flagstar’s technology improvements, strategic partnerships and product innovations are intended to strengthen brokers’ competitive advantage in an increasingly dynamic market.
“We feel our main duty to our mortgage brokers is to be as nimble, efficient and effective as possible in facilitating their mortgage transactions. More than anything, we want to make them look good to their customers and referral partners,” he says.
“With these enhancements on top of an ever-growing set of timely and marketable products, Flagstar Bank is well positioned to fulfill its mission empowering brokers to deliver on their goals.”