Today, more than ever before, mortgage leaders have had to shift their business models to serve customers online faster than any other time in history. This movement to mortgage automation is also being pushed by new technology players who are entering the space and changing the way mortgages are being done.
As a leader yourself, have you been able to keep up with the fast paced mortgage automation movement?
Before COVID, a lot of mortgage lenders thought they had time to start using automation. They wanted to do this type of automation on their terms but circumstances have changed. When COVID hit, many lenders were looking to implement automation tools fast. This movement has also sparked the idea of a One-click Mortgage, especially when there are rumors that Amazon may want to enter the mortgage space.
Lenders have to pay attention to the buying behavior of the upcoming new generation of home buyers in order to stay competitive. Aside from this, mortgage companies also have to make improvements to their core systems and train personnel on how the online mortgage process works. Without new improvements internally and externally these lenders will stay behind.
For example, shoppers are accustomed to ordering pretty much everything online from food to ride services. They have high expectations from companies and they have been exposed to more data than any other generation in our time. Meaning that applying for a mortgage loan online is normal, and is not something lenders can take lightly and wait to improve later.
Because of all this so-called mortgage automation movement the idea of a one One-click mortgage seems possible. Do you agree or disagree?
The way Besmartee defines a One-Click mortgage is by having someone click one button just once and automatically get a mortgage. Only with the push of one button and BAM!. Think about how you buy goods from Amazon. Same concept here. A One-Click Mortgage has to be done online and it has to have all the right data in order for this to function. Today no mortgage lender has a One-Click Mortgage but there are some that have led the charge to an online presence by having their own customized mortgage POS systems embedded into their technology.
The benefits of a one click mortgage can lead to an increased ROI and greater satisfaction among borrowers. Let’s look at the benefits in more detail.
- Mortgage Buyer who are ready to get a mortgage get satisfied quicker
Borrowers would benefit from this because if someone took the time to plan to buy a home, worked hard to improve their credit scores, saved money for the down payment, and can check all the boxes on the mortgage application then why not demand a less painful experience with a One-Click Mortgage. Would you want a less painful experience?
- Lenders who have invested in technology, process, and people will stay ahead of innovation
The lenders that invest in their technology today strategically with a vision and have a process that their people can be trained in will benefit now and in the long run. Imagine being able to provide this type of service. So merging technology, process, and people is what transforms a business. This is why the players that have invested heavily in all three have more market share than others. Of course there is also the execution side as well.
The industry is already working together by integrating important platforms that can make the customer experience better. CRM, POS, and LOS systems will be extremely important to begin the process of a one- click mortgage.
For example, Mortgage lenders who are revamping their technology understand that the CRM and POS must be the front end of the customer's journey. There is still a lot of work to be done at the back end of the mortgage process but the front end has already been proved with all the Mortgage POS software available today.
No one is leading the way to a One-Click mortgage yet. Some mortgage lenders such as Rocket Mortgage have been leading the online mortgage application process which have given them an edge on the market.
Excellent process and customer driven focus is a must in order to succeed. Technology is just the enabler of all this working together to create a One-click Mortgage. People still have to do the work.
Like any big innovation in any industry, challenges will be faced. For example losing the human touch, facing government regulation changes, change management, and internal operational challenges are a few. Let's discuss these challenges.
Challenge One: The Human Touch
Losing the human touch with the borrowers is a scary thought. For loan officers who were used to meeting their clients face-face that had to change during the pandemic but there is still the level of interaction via text, phone and zoom.
Does the human touch have a place in a One-Click Mortgage? Some may argue that this may never be possible and others may disagree. This is yet to be seen but it does not mean it is impossible or is it?
- Possible Solution: One possible solution is to engage the borrowers way before they apply for a mortgage. This means that lenders have to gain the borrowers trust way before they are ready to apply for a mortgage.one the customer is educated and informed on what they can qualify you as a lender is there with the one-click mortgage solution. Sounds simple but it is not and that is the beauty of making big innovation moves.
Challenge Two: Government Regulation changes
The mortgage regulation landscape is always changing and doing a One-click Mortgage seems impossible when Mortgage lenders have to comply with an alphabet of regulations such as TRID and others. But does this mean that innovators give up on the mission to a One-Click Mortgage? Maybe.
- Possible Solution: In order to achieve the One-Click Mortgage lenders and government agencies would have to work together to make this a reality. This means that a lot of regulation would have to be updated and data would be more important than ever before on both ends with lenders and government agencies. This seems like a hurdle that has no end but it’s something to think about in the future. Data, data, data will be the key.
Challenge Three: Change Management
It can be very challenging changing the behavior of an entire organization. The challenge here is that people have to work in a brand new way in order to support a one-click mortgage vision.
- Possible Solution: Changing an entire organization does not happen overnight so perhaps lenders need to create a plan where small changes happen over a course of a timeframe. After all, some of us never imagine working from home and look how that has shifted.
Challenge Four: Technology Systems Truly Working Together
There are still siloed systems within the mortgage industry today that are not connected to core systems or systems that do not communicate well. This is a big challenge because siloed systems create more administrative work and systems that are not communicating well can be a pain to both vendors and lenders because certain workflows can break creating delays and even interruptions.
- Possible Solution: A One-Click Mortgage cannot be achieved if there are siloed systems within the mortgage lenders technology stack. This means that mortgage lenders have to think as technology companies. They have to create a team of technology experts that really understand how technology systems work together and make sure that partners and vendors are connected seemingly. In a One-Click Mortgage there is no room for Siloed systems and no time to waste with old systems that don’t communicate well.
What do you think? As mentioned here there are a lot of changes that have to happen within the lenders approach to how they interact with potential customers, to regulation and technology. For now it can be a dream but with the innovation that is being poured into the mortgage industry it can become more than One-click Mortgage. Perhaps 10 clicks or 20 clicks. But are people ready for a one-click mortgage?
The attention span of Gen Z’ is about 8 seconds. The Millennials attention span is 12 seconds. As the attention span decreases in people so does their patience when it comes to buying online. For example, the Gen Z generation spends about 6 hours a day on their mobile devices. Another thing to note is that the Gen Z generation plans to buy a home by the time they are 25 years old. What does this have to do with a One-Click Mortgage? For one Gen Z will be the next wave of homebuyers and because they have grown with a device on their hand. They are more likely to adopt the concept of a One-click mortgage quicker.
At BeSmartee the One-Click Mortgage is something that we think about but our focus is to help the lenders close faster in less amount of time. We do this now by going deeper into the loan origination systems and being in front of the customer so that lenders do what they need to do best and that is serve their customers and close mortgage loans.
As we talked about in this article there is no one leading the One-Click mortgage now and in order to get there there has to be some major changes to the industry. Today, we can focus on transformation mortgages with automation which has already changed the way mortgages are done forever.