PERSON OF THE WEEK: Fintech company StreamLoan offers a mortgage point-of-sale (POS) solution that enables midsize lenders to quickly deploy an e-mortgage platform with full mobile capabilities. The company claims its solution represents a “reimagining” of the digital mortgage process because it brings together all parties involved – lenders, borrowers, real estate agents, appraisers, home inspectors, title insurance firms, notaries, etc. – on a single platform.
The solution – which is targeted mainly at midsize nonbank mortgage lenders, home builders with internal lending operations and credit unions – is unique in that it “pushes out” certain basic back-office workflow capabilities that do not exist in comparable solutions, thus enabling LOs, real estate agents and other parties involved in the process to receive alerts and take actions when needed via their mobile devices.
Interestingly, the platform enables a borrower to upload all of his documents and information just once – optionally, by taking a photo of the required documentation via mobile device – and compiles it into a type of virtual “passport” that enables a borrower to apply for different loans at different lenders without having to re-upload all of the information.
StreamLoan claims that with the level of automation its platform delivers, lenders can reduce the average time to close a mortgage by about 50% – from about 40 days to about 15 days. To further its development efforts, the firm recently received $2 million in seed capital from investors including Acorn Pacific Ventures and Whitespace Capital. What’s more, StreamLoan recently announced its first integration with a major mortgage loan origination system provider – LendingQB.
To learn more about what it takes to launch a new mortgage POS platform in what is quickly becoming a competitive marketplace, MortgageOrb interviewed Stephen Bulfer, CEO and co-founder of StreamLoan. What follows are excerpts from our interview.
Q: What led to the launch of StreamLoan, and why is there a need for another POS solution in the digital mortgage software space?
Bulfer: The genesis for StreamLoan stems from my background as a real estate investor. Just after high school, I started investing in real estate and built up a residential REIT in seven major markets in the U.S. And then, after [attending an educational program at] University of California at Berkley and Columbia University, where I studied the subprime collapse, I went back and formalized my education in real estate finance. That’s kind of where this started. You know, real estate transactions suck. Mortgages suck. There’s so many things that are broken. Collaboration and communication is broken. Automation is lacking – and customer service, well, you see that the Net Promoter scores are negative.
After college, I went off to Deloitte, and spent the first half of my career building technology solutions for the Fortune 500 – everything from building credit card authorization rails for VISA, out to doing security work at the White House and the executive office. It was while I was building this technology that I became aware of the pain points in the mortgage process.
When I sat down and really began to look at what was wrong with the process, I realized that it came down to three main problems: automation, collaboration and transparency, and how to bring those to all the parties involved.
Now, there’s a lot of really interesting stuff out there – whether it is Rocket Mortgage by Quicken Loans or some of the competing solutions out there. But, we thought about this a little bit differently. Most of our competitors are really thinking about the application process. How does the borrower apply for a mortgage? Form 1003. But it really ends there.
Some of them talk about collaboration. But we took a big step back and asked, who are all the parties? Appraisers, inspectors, attorneys, private accountants … and, of course, there are the real estate agents, the transaction coordinators. There’s also processors, underwriters, loan officers, junior loan officers, branch managers… the list goes on. So, there are a number of parties involved. And up until now there hasn’t been a great way to bring them all together under single pane of glass. That’s what we have achieved.
A big part of the process was defining the roles – bringing the notion of role-based access, and privacy and security controls, to protect, first and foremost, the borrower. But then, very quickly we realized that the application process was not enough; there’s the entire fulfillment process, the manufacturing of the mortgage and everything downstream on the way to the close.
And then there are things that go on even before the application process. What about during the shopping process? Imagine a real Eetate agent working with you on your first purchase in New York City, and you’re looking for a one- or two-bedroom condo. How do you get started with a customer experience, and keep it going, from that first touch, bringing speed and education, all the way through not only through the application process but the entire fulfillment process? That’s what we’ve done.
Q: Do you think you had an advantage over your competitors because your solution came out a little later, thus giving you a chance to build and expand upon what they were doing?
Bulfer: The guys who came out [with all-digital POS solutions] in 2012, they ended up spending quite a bit of capital and time trying to figure out, “What is the baseline set of digital mortgage POS capabilities?” So, I think coming to market with a beta product in 2015, that was commercialized in 2016, we had a chance to learn some lessons from those guys. Rocket Mortgage launched just about one quarter after we launched our first beta product. So, the timing was interesting.
But even with that evolution, the accent for us has been on keeping the borrower in the loop – putting the emphasis on the vantage point of the borrower through the manufacturing process. Our goal is not only to make the process much easier for the borrower but also to make our lending and real estate partners, along with all the other parties involved in the process, look like superheroes. Essentially, we have extended [certain back office] capabilities to a mobile POS solution by re-imagining the way in which all the parties involved in the transaction work.
Part of the problem in the mortgage industry is around sales and marketing optimization. If you take the loan officer, for example, or the real estate agent, they’re really sales people, at the end of the day. And they need to be out selling and building their book of business. So, giving them tools – lead management tools, pipeline management tools – that allow them to originate and start that process anywhere they are – whether it’s at an open house or online – is really important. It is what really brings them into the funnel – by allowing them to get notifications and alerts on the things that are important to move on.
For example, if an LO has 50 loans that he or she is working on, how does he or she know which ones they need to work on first? We’ve done some really smart things around notifications and alerts – and allow them to interact with those loans from their phone or mobile device – and to have a lot of the capabilities of the LOS that are typically locked up on the desktop in the office. The goal is to let more of the documents and more of the [LOS] data to flow through – and to deliver custom notifications to all of the parties – giving them a dashboard and toolset that goes beyond borrower status update.
Q: Would you say that your mobile capability is what makes your platform different from competing products?
Bulfer: Yes. And again, from what we’ve seen from the other players in the space, their accent is on the application process – and less on productivity tools for the other users. If they have any productivity capabilities at all, they’re still quite nascent, and in some cases non-existent.
We’ve been building capabilities for a couple of years now that go beyond just the borrower experience. And we’ve been winning deals from customers who have been telling us, “Hey we’ve tried XYZ Company for POS, but we’re not getting the engagement and the productivity that we want out of this. We would really like the mobile capabilities and the productivity capabilities for our LOS.” And in many cases, they are using [our platform] as part of a recruiting tactic, to bring on new LOs or to retain existing ones.
I must emphasize that we are not a mobile-only company. We just happen to build great mobile software. But a couple of my previous companies that were acquired were mobile companies. That’s why we have a strong belief in taking advantage of true mobile capabilities.
Q: Lead management has always been a specialized segment in the mortgage technology realm, and yet your platform is bleeding over into that a little. Are you partnering with any other technology companies to add theses capabilities to your platform?
Bulfer: I wouldn’t consider ourselves by any means a CRM company – and lead management and pipeline management sort of fall into that world. However, we saw that there were gaps in the market. The large CRM platforms, although highly configurable, are still fairly generic in terms of the workflows. So, we saw an opportunity to capitalize on building out these points of interaction – where a home buyer is walking into an open house or a home builder site. That obviously has CRM-like implications.
Ultimately what matters for [the Realtor or lender] is to capture that lead and to have a “sticky relationship” with that prospect. So, when we talk about lead management and pipeline management, it’s really just that piece. Are we doing email campaigns and segmentation and all that stuff? No, we’re not doing that today. We will partner for those capabilities. But we do find that there is a significant gap between what LOS/CRM, as a combined category, are providing, or even what other POS systems are providing today.
To that end, we did a soft launch with a very large group of real estate agents in December, we are continuing to roll it ou,t and we’re seeing a lot of interest.
Q: What do you think mobile holds for the future of mortgage transactions?
Bulfer: All kinds of efficiencies, especially for LOs and real estate agents. Currently, they’re inundated in all kinds of software tools, many of which don’t provide any real value. They might have 30 apps – but they mostly use just one or two. There has not been anything truly mobile-enabled for the industry that provides value.
More importantly, we know that the industry is shifting – JD Powers put out a research study recently showing that 62% of respondents are open to using mobile for their mortgage application. We believe that real estate is inherently a mobile transaction. Think about a borrower jumping into a car and riding around with an agent [to look at homes] – or going and looking at open houses – in these highly competitive purchase markets where you have multiple offers coming in from different borrowers. That’s a case where speed of information and communication matters the most – especially for first-time home buyers.
Today, we can enable the borrower to make those decisions quickly and proactively via the mobile device of their choice. So, we’re seeing very high, double-digit utilization of mobile as a first-choice platform.
Of course, we have web, as well – and we make our features and capabilities ubiquitous across all platforms. But we do believe that mobile is the way of the future. We will be in a place, in the not-too-distant future, where you will be able to walk into an open house, with your phone, put a bid in on the house, the bid will clear a certain threshold, much like an eBay auction, and they will close the open house saying “bid accepted.” This will be possible only because the financial information of the borrower will have already been collected.
That’s something that we already have today – it’s called the StreamLoan Financial Passport – and it allows us to collect all the data and documents for a particular individual and then use it for automated underwriting purposes. All of that information is automatically bumped-up against the pre-set thresholds and underwriting limits, in advance – and, with this pre-underwriting concept, the transaction will already be done.
Now, the industry is not there yet – there’s a lot more work to do – but that’s where we see the future of real estate transactions heading.
Q: What’s your strategy for getting mortgage lenders to adopt a digital front-end and, more important, to adopt your particular POS solution? What about those lenders that feel that e-mortgage technology is a waste of time and money because they feel very few of their borrowers will actually make use if it?
Bulfer: Although the value proposition is clear, adoption has been slow – and that’s been a theme across the industry. It doesn’t matter whether it is Rocket Mortgage or Blend or anyone else – we all face that same challenge. The question is how do we tackle it – and what are we doing differently?
I spent the first half of my career at Deloitte – and most of my role was building technology and then onboarding users – and digitally transforming large organizations. Having them think about how to do work differently. Part of that is tech – but part of it is change leadership and change management. From what we’ve seen, from the customers we’ve worked with, is that by and large, they don’t have this as a mindset. So, it takes education and it takes hand-holding to get them to think differently about how to implement new processes and tools.
Also, we’ve spent a lot of time in the mortgage industry, going really deep, with a few customers, trying to figure out, “What does it take to onboard and train and enable them with digital and mobile technologies?” And we’re seeing that methodology work. It’s slower with the first few customers – if you go really deep – but we’ve developed our own playbook for how to roll the platform out. And as we bring this to additional lenders, we’re finding economies of scale, in terms of speed of adoption and deployment.
For us, there’s a lot to figure out. What are all the incentives for change? What does a steering committee look like for these types of engagements? Making sure you have executive buy-in – and making sure you have buy-in throughout the organization. So, we know a little bit about change management – and a lot of the customers we work with appreciate that. Because many of them don’t know how to roll something out – or how to roll it our well.
Q: But what about lenders’ concerns regarding how much the technology will actually be used?
Bulfer: I think we’ve found the right balance of comfort and also having a wide variety of ways for lenders to engage. A lender using our platform can be “mostly digital” – but then, our perspective is, we’re building tools to help our lending partners and real estate professionals become home-buying superheroes. So, if a borrower wants to print some documents and then walk to the office and drop them off – and later send some data and documents through the platform – they can do that. We offer a spectrum from very rudimentary hand-holding to a completely automated, low-touch process.
Also, the playbook that we’ve developed for customer onboarding and rollout addresses a lot of the problems around consumer adoption. As a result, the consumer adoption rates that we’ve seen are sufficiently higher compared with the average of other similar platforms out there – and that’s because of the approach that we’ve taken, including our knowledge of change management and change leadership.