Solving the Cost-to-Produce Problem in Mortgage Lending

As loan production volume shrinks, production costs explode and competition ramps up, loan officers want to know:

How do I get borrowers to commit to me before they shop around with other lenders?

Conversely, borrowers don’t even bother to ask, but rather demand a borrowing experience as seamless as their digital coffee ordering app.

So how do you satisfy borrower demands, capture leads and reimagine workflows to empower your LOs?

It seems like a daunting task, but with the right technology it is possible.

Is Digital Transformation Fool’s Gold?

Many lenders have started dedicating too much time and money toward streamlining – even building from scratch – digital platforms to give borrowers app-enabled experiences. This “shiny object syndrome,” which prioritizes front-end flash over the larger loan experience, is a fool’s errand. It’s a requirement, but it’s not the complete picture.

Manufacturing a loan is much more than a borrower filling out an application and providing documents.

Consumers demand applications where they can request information, conduct research or even apply for loans in seconds with omni-channel flexibility.

But tech is the catalyst, with the loan application a small segment of the larger whole. Your business is based on people, processes and systems.

Stop spending all your time and money on glittery APIs that only touch the first 40 minutes of a loan process and reimagine your approach. Dig deeper, rethink your process and digitize beyond the first touchpoint.

Striving for True Innovation

The battle for digital innovation is here. And the victors will be organizations that understand not only how a loan gets closed today but are ready to truly reimagine the digital mortgage process for tomorrow.

If most of your resources have been focused on the small, digital section of loan production (borrowers applying for a loan), then the majority of your bedrock processes are still waiting to be optimized.

Help your loan officers see what’s possible by empowering their whole workflow with better business intelligence, including data, calculations, loan scenarios, compliance, feeds, pricing, disclosures and risks. Even a simple process automation of a previously manual task can dramatically improve your cost-to-produce ratio.

We saw one organization earn $300,000 in increased monthly productivity simply by automating digital loan disclosures that previously were mailed directly.

With loan origination costs sitting around $9,000 per loan, and purchase volume sinking net profit per loan, saving just hours of efficiency in your loan workflow can mean real revenue growth. What’s more, reimagining how a loan goes through the process means you’ll close loans faster while better serving your customer’s needs. Digitizing the loan process adds value to all involved parties.

Beyond Consumer Expectations

The customer journey cannot fall flat at any stage; it must be deliberate, it must work and it must meet the high benchmark of customer expectations. Other industries have embraced the virtual experience — the financial services sector must do the same.

Following a loan approval, borrowers are overrun with requests for documents, asset verifications and miles of compliance speed bumps on the road to closing.

Ignoring your customer’s journey once the application is filled out — and the processes that comprise most of their experience — is stifling your ability to originate loans faster and more simply. Create a seamless customer experience across the whole process that borrowers never knew they were missing.

Bring your loan officer closer to the borrower at every stage of the loan application and approval process, adding back office efficiency to your current tech stack to eliminate cumbersome manual tasks that can be a headache for both the LO and borrower.

An enterprise approach to your technology stack provides a tighter feedback loop between parties, superior relationship cultivation and fewer unexpected complications.

All That Glitters is Not Gold

Organizations face an unenviable challenge: working to fill their pipeline with flashy but often incomplete digital workflows.

There is no silver bullet in the digital transformation gold rush, but organizations can start winning both the digital game and the cost to produce battle by empowering the borrower and the LO beyond the first 10 minutes of a loan application.

Kyle Kamrooz has 20 years’ executive management experience in residential mortgage lending. While serving as EVP at Skyline Home Loans, Kyle developed the digital mortgage platform that would become Cloudvirga™. Since 2016, Kyle has attracted multiple rounds of investment funding, set the vision for Cloudvirga’s revolutionary digital mortgage platforms and signed clients that include eight of the nation’s top 20 mortgage lenders. Kyle’s commentary has been featured in TechCrunch and Huffington Post. He is a member of the Forbes Finance Council, a HousingWire Vanguard Award winner and one of Entrepreneur magazine’s inspiring tech entrepreneurs under 40. He was named Orange County, California’s Innovator of the Year 2018.