Third-Party Data Now Critical For Mortgage Lenders’ Technology Initiatives


Today’s borrower is more knowledgeable about the mortgage process than previous generations. Instant access to residential property information, including tax data, historical value, and personal credit information and competitive loan options – often via a mobile device – has forced lenders to adapt to a new reality and is fundamentally changing how they operate.

Today, the entire mortgage industry is being impacted by the efficiencies that come from deploying new technologies to automate, simplify and speed up each step of the mortgage process, helping to bring us closer to a complete end-to-end digital lending experience.

Technology has played a key role in driving lenders’ operational efficiencies for years. Now, the lens is focused outward toward driving efficiencies for borrowers as they navigate the home buying process. In today’s market, the most successful lenders are those that are able to best meet borrower expectations of speed and convenience and deliver on that in a way that creates a delightful customer experience.

Success in this new borrower-lender model hinges on the ability of the lender to effectively leverage third-party data that helps provide instant access to borrower information within a secure environment, enabling quicker, often same day, decisions regarding a loan application.

This requires information such as paystubs, lines of investment accounts, bank statements and other details to be verified through third-party integrations and helps to benefit borrowers by significantly reducing the amount of paper documentation required from them.

Utilizing third-party data can help reduce processing costs. It can help to boost efficiency and free up internal resources that can be focused on closing more complex deals, with the potential to create more revenue for the lender.

Having access to the right data can bring a higher degree of certainty to the process and can help yield fewer defaults over time. Increasingly, lenders are being required to go beyond the standard credit score to include additional data such as income, asset and employment information when evaluating potential creditworthiness of borrowers. Evaluating more data in a compressed timeframe demands greater levels of automation on the lender side.

By automating more of the process, the role of the loan officer (LO) is fundamentally changed, including the LO’s interaction with borrowers. LOs are now engaging further downstream in the process and in the midst of an accelerated pace of activity.

Ellie Mae’s 2019 Borrower Insights Survey shows that while borrowers across every generation expect digital options to be part of the loan process, they are also interacting more frequently with their lenders across a multitude of platforms.

The challenge for lenders then becomes: “How do I communicate responsively, accurately and consistently with my borrower, regardless of the channel used?”

The key to optimizing the customer experience is understanding how borrowers want to interact. The Ellie Mae study identified nine different forms of communication: fax, email, phone, chat, mobile app, in-person, direct mail, text and online portal/website.

Millennials and Gen Xers used all nine forms of communication to interact with their lenders, and both younger generations communicated with their lenders more frequently than Baby Boomers. What this means for lenders is that they must be able to provide an equally high-quality experience within each of those nine distinct channels.

Lenders should offer tools that will accelerate the application process, such as pre-populating digital documents with any personal information available, to further engage digital borrowers. Online information geared toward the tech-savvy, hands-on borrower, such as educational materials, loan calculators and chat boxes for frequently asked questions are now expected capabilities for lenders to provide.

Ultimately, it is important to create a seamless experience for borrowers as they maneuver between online and personal interactions. Offering the option to speak with a loan specialist at every point in the application process and designing a digital journey that leads to more meaningful personal engagement are now necessities of doing business.

To fully integrate human interactions and automated services, loan officers need the tools and training to successfully engage with borrowers where, when and how they want to engage. One example is what is known as “co-browsing,” where loan officers share a portal with an applicant and guide them through the process in real-time, responding to any questions they may have.

The evolution of consumer technology and the subsequent expectation of immediacy also demands that loan officers know when someone fills out a form or requests information online and that they proactively respond to any requests. Research indicates that just 7% of companies respond to an online request or form within five minutes, while more than half of companies didn’t respond within five business days. Today’s borrowers will not be kept waiting and are more likely to work with the first organization that they hear back from.

As lenders transition more of their internal processes to digital solutions, it is vitally important that they help their team members manage this transition to a new way of working as well. Successful lenders are helping their legacy sales staff envision their future within the new digital environment and bringing new talent into the fold and letting them help lead the way. 

While the industry continues to enjoy the efficiencies and cost-savings technology has delivered, lenders and borrowers alike must continue to embrace technological changes and advancements, which will ultimately redefine the mortgage process. To excel in this competitive and challenging marketplace, the mortgage industry must continue to make greater investments in technology and invest in ways to enhance the borrower experience.

Jennifer Henry is vice president of strategy and marketing for Equifax Mortgage and Housing Services.

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Jonathon trot
Jonathon trot
4 years ago

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