Amazon Mortgage? It's a Jungle Out There
Online behemoth Amazon is eyeballing the mortgage space according to HousingWire’s Jacob Gaffney. The retailer is reported to be looking for someone to lead an eventual mortgage division after they make their entre into financial services by offering checking accounts. Amazon may have led to the demise of many brick and mortar retailers, but even as the term “digital mortgage” is ever more frequently bandied about, mortgage companies and loan officers shouldn’t panic thinking that they will follow suit. The growth and popularity of Amazon affirms consumer enthusiasm for online shopping – but industry data shows there are still some things people want professional, human help to buy.
Fannie Mae’s National Housing Survey for Q117 asked people who had recently obtained mortgages how they communicated with their lender during the loan process in their recent transaction and how they would like to do so in the future. In-person communication was the only method that showed an increase in borrowers’ desired usage for their next loan. Additionally, Ellie Mae’s 2018 Borrower Insights Survey revealed that “a faster process” was the biggest thing that could have improved respondents’ recent mortgage experience – followed by “more face-to-face.” Perhaps surprisingly to some, Millennials rated increased in-person contact higher than any other age group. What does this mean for companies and MLOs?
“Digital mortgage” is most certainly a buzz term making its way into the public consciousness courtesy of excellent, prolific marketing efforts. And it’s definitely in the industry’s best interests to improve and increase use of technology and automation in light of the fact that origination costs have more than doubled since 2009 according to the Mortgage Bankers Association. Borrowers seem to be attracted to – and dazzled by – the concept of a digital mortgage, but in reality, they want a personal mortgage.
Technology and automation can mitigate a lot of challenges – including rising production costs. The key is to deploy it as part of your overall strategy to deliver an experience that creates customers for life. Whether it’s Amazon or another disruptor we don’t yet know about, competition is brewing everywhere. Be aware of what competitors are doing but be sure to deliver what the customer wants.