BLOG VIEW: After a red-hot summer, the mortgage industry has significantly cooled. The fall in mortgage volume has had devastating effects for mortgage providers. According to ATTOM, mortgages in the third quarter were down 19% from the previous quarter and down 47% year over year, constituting the largest annual decrease in mortgages in more than 21 years.
The mortgage industry is starving, and any loan volume is potentially game changing. However, low mortgage volume is notoriously difficult for mortgage providers to gauge and address. Many either do not understand the severity of the issue, do not know what they can do about it, or do not have the resources to implement any potential strategy.
One potential solution might lie right under mortgage providers’ noses. A large number of mortgage applications are inevitably incomplete or abandoned. A 2020 Signicat survey showed that 50% of all online financial applications are abandoned, and Forbes contributor Dmitry Dolgorukov noted that 68% of fintech applications are ultimately abandoned.
These reflect online financial processes across the board, but the mortgage industry is no different. In fact, mortgage applications are especially prone to abandonment due to the long list of highly detailed information needed to complete an application, so whether a customer is completing a mortgage through their bank’s website or through a third-party service, they are very likely to abandon their application. Mortgage providers are losing a massive amount of potential volume from people who have already started an application.
The revenue left on the table represents an opportunity for mortgage providers to come out on the other side of the economic slump stronger than before. However, exactly how to recapture abandoned applications is an infamously difficult challenge.
Maybe the most straightforward and obvious solution would be to do it manually. However, reaching out to applicants who drop would require many resources, time and manpower. Mortgage providers would need to take time out of their day to use whatever information they have to personally contact applicants either via phone or email. This approach is costly and inefficient, demanding that mortgage providers either expand their teams or divert resources away from other priorities to recapture abandoned applications.
While manually recapturing applications is not worthwhile, new automation technology enables mortgage providers to recapture abandoned loans in a way that is efficient and effective. Intelligent process automation (IPA), which is the use of advanced technology to complete or accelerate processes, can use already on-hand data to contact applicants. By using IPA, mortgage providers can effectively connect with applicants without taking away from their other important business processes.
IPA is a powerful tool for mortgage providers, but it’s not the end of the story. IPA takes the core concept of process automation and implements even more innovative technology like AI, machine learning and cloud integration to surpass the capabilities of traditional process automation.
For the purposes of recapturing abandoned applications, if traditional RPA can message applicants using the contact information on record, IPA can reach out to the applicant, identify what information is needed to complete the application and provide a quick and easy way for the applicant to share the relevant documents.
IPA can also utilize a cloud-based infrastructure, further lightening the load on the mortgage provider’s IT load.
There is no magic bullet solution for mortgage providers’ problems as mortgages dry up, but application recapture solutions can capitalize on people who are already interested in applying for a mortgage.
As mortgage applications become fewer and farther between, it will become more important for mortgage providers to stretch ongoing applications as far as possible. Loan recapturing is not the only thing that IPA is good for, but it could be its most important application for mortgage providers in the coming months.
Joseariel Gomez is founder and CEO of Shastic, which provides robotic process automation solutions to banks.