Josh Friend: What Lenders Can Do To Prevent Borrower Frustration


PERSON OF THE WEEK: Josh Friend is founder and CEO of InSellerate, a specialized customer relationship management system that enables lenders to immediately connect to leads while prospects are actively engaged in the decision-making process, manage their sales team in real-time for maximum efficiency and return on investment (ROI), and build strong long-term customer relationships through automated nurture marketing campaigns. Friend recently spoke with MortgageOrb about the most frustrating things consumers encounter when getting a mortgage and what lenders can do to improve the experience.

Q: What do borrowers find most frustrating about the current mortgage process?

Friend: Nobody likes to be ignored, so when prospective borrowers reach out to a lender and don’t hear back, they are naturally frustrated. Mortgage lenders spend a lot of time and money to find potential customers, but studies show that they fail to respond to nearly two-thirds of prospective borrowers who contact them – either they don’t respond quickly enough and the consumer moves on to another lender, or they fail to follow up at all.

Borrowers are also incredibly frustrated with the new disclosure laws. The biggest thing they complain about is having to provide more and more documentation right up to the moment of closing. What’s even worse is that a lot of times, they have to re-send the same document multiple times because the lender lost it and needs another copy. There is simply no excuse for losing documents with today’s technology. For instance, in addition to being a lead optimization and sales automation system, InSellerate enables the loan officer to stay on top of the situation all the way through so this doesn’t happen. It connects the loan officers to the borrowers in real time; gives them up-to-the-minute status reports on the loan in process; and enables them to communicate with the borrowers through email, text or phone.

Q: How can lenders boost their lead conversion rates and bring in more customers?

Friend: Originators like hot leads and want to convert as many of them into customers as possible. We help companies optimize their lead opportunities by communicating with prospects when they are actively engaged in the buying process. In less than 30 seconds after a prospect first contacts the lender, InSellerate instantly and automatically identifies the most appropriate and available salesperson and dials the prospect’s phone number, putting a salesperson on the phone with him or her. That immediacy significantly increases the probability of converting the lead into a closed loan. The workflow automation and lead prioritization function also ensure that customers are being communicated with at the appropriate time.

Our system also delivers insight into each channel’s effectiveness so the lender can adjust – in real time – to maximize lead acquisition and ensure that no lead gets left behind, resulting in optimized return on lead generation investment. As the percentage of consumers who research and purchase products and services online continues to increase, the keys to driving ROI will be efficiency and immediacy.

Q: What are the biggest compliance errors loan officers make while the loan is in process, and what should lenders do to mitigate compliance risks?

Friend: The biggest errors are in disclosing incorrect fees and in borrower communications. With our new compliance laws, the lender is responsible for disclosing all fees and is held liable if it gets them wrong. Where we see the most common problems are with mortgage taxes and inspection fees, such as well and termite inspections. These are not always known up front and cause a lot of compliance issues.

There are many areas of compliance risk involving written borrower communications, whether they be emails, text, regular mail or flyers. These all have to be done in a compliant way. Over the past few years, there have been many new laws passed covering what needs to be disclosed when communicating with the borrower. For example, the loan officer’s NMLS number is required on all correspondence. You also have to be careful about what exactly you tell the borrower. Being clear, accurate, honest and concise up front will help mitigate some of that risk, but you also need to have a systematic way to track borrower communication to help ensure you are doing it right.

Q: Can housing make a full recovery without first-time home buyers reaching their full potential? How can lenders help first-time home buyers purchase a home today?

Friend: First-time home buyers drive a healthy real estate market. However, the percentage of first-time home buyers in the market today is at least 10% less than historic levels. Lenders can do more to raise that level. Getting a loan for the first-time home buyer is a daunting task. Making the process simpler and more pleasant would help. Responding more quickly when a prospect calls is a big first step. So is being compliant with disclosure rules. This group of first-time home buyers, the millennials, is going to be the future of our market. They expect great service and an easy process. We have to be able to deliver that, and we can.

Q: What role does technology play in helping loan officers maintain relationships with their clients over the long term?

Friend: Once a lead turns into a client, the process of turning him or her into a repeat and/or referring customer should begin. By making the process easier for the borrower, you can help retain that person as an ongoing customer for years to come. After you close the sale, you can retain and build strong customer relationships for life through automated marketing campaigns, such as direct mail, email, etc. Good technology solutions can automatically help keep the loan officer in front of potential, current and past customers. It is one of the most fruitful and cost-effective ways to easily grow production. After all, it’s common knowledge that the cost of getting another loan from a past customer is a lot lower than finding a new customer.

Q: Are mortgage lenders bigger targets for security breaches because of the financial information they have stored? Are they doing enough to minimize any cybersecurity threats? What more should they be doing?

Friend: Mortgage lenders are definitely at greater risk because they have all of a consumer’s financial information. Very few institutions have all of your financial documents, so mortgage lenders are a high target. They, therefore, need to be more diligent about cybersecurity. Mortgage providers are required to vet their vendors. They need to make sure they have passed an SSAE 16 audit. Technology platforms matter, too. By using Microsoft Azure cloud, virtual private networks, and leveraging a multi-tier application architecture where the web servers are separate from application and database servers, there is no public or user access to where your data sit. That’s the most secure way to hold and store data.

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Rodger Cosgrove
Rodger Cosgrove

Every loan is the result of a process of several steps — lead generation/inquiries, application, acceptance, documentation, processing, etc. If an originator can improve five critical steps by 15% each (which should be largely achievable, right?), then total production doubles. Doubles!

The right CRM or PRM (Prospect Relationship Management) can make a huge difference in the critical leap from inquiry to application, and in the efficiency of subsequent processes. If Insellerate is designed and optimized for the retail mortgage market, so much the better.