Joel Rickman: Mortgage Lenders Facing Rapid Changes in 2022


PERSON OF THE WEEK: Mortgage lenders have had to keep pace with some rapid changes during the past two years, particularly with the impact of the pandemic, and it as looks like the pace of change won’t be slowing in 2022.

Now, as the industry shifts to a purchase market, new challenges loom on the horizon, including rising mortgage rates, increased regulation, super tight housing inventory, rising home prices and lack of affordability. As a result, the lending industry will likely be going through yet another contraction and subsequent operational adjustment period in 2022.

With the recent drop-off in origination volume, some lenders have already commenced mass layoffs. This loss of staff can sometimes equate to an inability to scale should volume suddenly rise again. Meanwhile, the regulatory landscape is constantly shifting, creating its own set of challenges.

Today, financial institutions need to be agile, fast, and flexible to keep pace with the changing market, regulatory pressures, and borrower preferences. To learn more about how lenders can rapidly flex and scale to meet this influx of change, MortgageOrb recently interviewed Joel Rickman, senior vice president verification services at Equifax Workforce Solutions.

Q: How can lenders leverage technology to manage changes as the housing market continues to shift?

Rickman: Many changes are happening in the market right now, but one thing remains constant—when consumers need loans, they often want them fast, and more importantly, they want the approval and always want to ensure they can lock in interest rates.

That’s why lenders need data-driven insights and solutions to approve loans while minimizing risk quickly. We are seeing increased shopping behavior for every loan originated and this is increasing competition to secure the customer.

Income and employment verification is an excellent example of a notoriously clunky and manual mortgage loan origination step that might slow the process. However, there are readily available technology solutions for lenders to instantly and securely determine loan affordability. 

For example, suppose loan applicants have to wait for a few days to get that initial answer, or they have to upload many documents manually. In that case, they’ll often try a couple of other websites or lenders to see if it’s easier before they commit to that much work.

Lenders creating a simpler process for consumers to get the loans they need can increase the odds of conversion. Tech and data can also help lenders quickly and efficiently underwrite applicants, regardless of where they fall on the credit spectrum.

Many financial institutions may be looking to cut costs as loan volumes reduce. Are there ways for these companies to stay afloat even if they aren’t looking to make large technology investments.

For most lenders, savings are waiting to be tapped across many categories by maximizing efficiency. The key to this is automation. Automated technologies mean employees spend less time on traditionally manual tasks. By reducing the amount of time spent on tedious tasks, reducing the chances of human error, and speeding up the time to close—lenders will be better able to operate more efficiently, reduce costs, and increase conversions simply through automation.

And for many mortgage lenders, these cost-savings can be hiding in plain sight. Technologies that enhance automation are already available in their existing loan origination systems. 

Q: How do data and technology, such as instant income and employment verifications, provide value to consumers?

Rickman: Well, for starters, it’s a required part of the mortgage approval process for lenders — and it helps them better understand risk. But it’s also beneficial for consumers, especially when automated.

The process of securing a mortgage can be daunting. With access to instant income and employment verifications, the lending process — and your borrower experience — can be expedited and more streamlined. This means no more stress over lost paperwork, no more wasted time on follow-up emails to HR, and no more needless obstacles between you and your loan. It also means that borrowers can get approvals and rate locks faster.

In addition, automated verifications can give the millions of Americans who have thin or no credit files a chance at homeownership. With traditional loan decisioning processes, these individuals are at risk of being denied loans, regardless of their actual ability to pay. Income and employment data help present a fuller picture of your financial situation. So you still have the opportunity to get the loans you need and may qualify for, even with a low (or no) credit score.

Q: What are you most proud of in your career?

Rickman: This is a very thought-provoking question. So many times, we want to defer to big deals, record growth years, or acquisitions that sprang our careers forward. However, I would say that what makes me the proudest is less a specific moment or task accomplished but more around when I have my teams truly operating effectively and in harmony.

This balance is not easy, and it isn’t a constant. Teams come in and out of alignment. But when I have my team working in full collaboration and aligned with the business and the market, that drives a level of confidence and pride unprecedented with individual accomplishments.

I am incredibly fortunate to have an excellent team at Equifax and have them working towards the same goals and working together to address challenges verifiers face daily. Taking top performers and getting them aligned and connected to be a top-performing team amplifies all of our accomplishments.

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