Broker Clients Say Frustration Is High

Broker Clients Say Frustration Is High

How automation can relieve borrower complaints

BY JOEY MCDUFFEE | SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL

After one of the craziest years on record, brokers and loan officers will enter 2021 with much to be thankful for, including low rates and more than enough borrower demand to go around. At the same time, there’s a prevailing feeling of missed potential.

Nothing tapped into this feeling better than the J.D. Power’s 2020 U.S. Primary Mortgage Origination Satisfaction Study. Released in November, the survey found that overall borrower satisfaction rose six points on a 1,000 scale from last year. Yet borrowers weren’t happy with long loan processing times and lackluster customer service and self-serve options, according to the survey.

To be sure, a global pandemic contributed to these problems, as soaring volumes created bottlenecks for almost every lender. Yet a great deal of what is causing borrower frustration is within a lender’s control to fix. And with a robust spring homebuying season approaching, there’s no better time to do so than now.

THE KEYS TO HAPPINESS

According to the J. D. Power survey, one of the biggest frustrations many borrowers have is with infrequent communications from originators. The challenge is in striking a balance between too little communication and too much, both of which can negatively impact the borrower experience.

Some communication is obvious. Disclosures need to be sent and returned at certain times based on regulatory requirements and underwriter requests require the borrower’s attention. But if you’re sending too many emails and texts to the borrower, the borrower may start ignoring them and miss an important message, such as the need to provide an updated paystub for underwriting. Too little communication, on the other hand, and the borrower may think you’re ignoring them—and may look elsewhere for help.

Through automation, however, loan officers can communicate much more effectively with borrowers with branded reach outs and reminders that can be sent with the right frequency depending on each borrower. Creating this “just right” Goldilocks approach boils down to leveraging data to understand the status of each borrower and reaching out at the appropriate time based on the time to close and the borrower’s individual behavior.

Automation also helps brokers and loan officers create the ideal level of assistance for each unique borrower. While today’s younger borrowers appreciate a self-service mortgage experience, most still like having the mortgage process being laid out for them step by step and having access to on-demand assistance when they need it. While they may be able to spell the word “mortgage,” most don’t know all the ins and outs of what they need in order to get their loan processed and closed.

Fortunately, we have more options now to merge a digital self-serve experience with more personalized training and help to put the broker or loan officer into the position of trusted advisor. Previous attempts to bridge this gap were done with online chat via the lender, broker or loan officer’s website, usually with substandard results. Anyone who has tried using chatbots understands the vast majority are no better than the typical automated phone tree, and usually much worse.

More recent technologies, however, allow loan officers to “co-browse” and video share with borrowers as they fill out applications online and provide help whenever it’s needed. If the borrower runs into trouble, the loan officer can assist and explain the need for certain information or clarify what the borrower is being asked for. These tools can provide intuitive real-time training and assistance sessions that make the application process go much more smoothly.

IDENTIFYING THE RIGHT TOOLS

From a sales perspective, it’s more crucial than ever to use mobile technology to stay connected with borrowers. Multiple studies have found that smartphone use has soared since the start of the COVID-19 pandemic, as social distancing has placed the online and mobile consumer experience front and center.

Banks are doing quite well in this area. In November, the American Bankers Association reported 99 percent of consumers rated their bank’s online and mobile app experience from good to excellent, 4 percentage point higher than the previous year. The national survey, conducted by Morning Consult, reported 84 percent of those surveyed said innovation and technological improvements by banks are making it easier for all Americans to access financial services.

Fortunately, for mortgage loan officers and brokers, new mobile technology is available to access automated tasking, such as sending borrowers notifications about when disclosures and other documents are due. Originators can create proactive lists of items needed from the borrower, and receive alerts when they need to follow-up. They also have the ability to pull credit and provide rates and prequalification analyses, so they can build relationships with their customers no matter where they are to streamline the application process.

Many believe the imminent roll out of the new Uniform Residential Loan Application (URLA) will give originators a major boost when it comes to improving the borrower experience. While the new form is dynamic in nature, the reality is that it’s a more simplified version of the traditional 1003 application. The ability to use it to make the mortgage process smoother and faster will rest entirely on how lenders implement the new forms and whether they can use them to deliver a more digital experience overall.

If anything, the new forms could make it more difficult to improve the customer experience, at least initially, because they will require a good deal of time and training to implement. Adoption may not be nearly as complex as the TRID disclosures, but there is always a learning curve in our industry when new forms are introduced. For years, underwriters reviewing loan packages knew where to find the information they needed on the 1003. These ingrained behaviors won’t be easy to change and new features will not be easy to adopt.

WHY IT’S ABOUT THE PLATFORM

Still, in the coming year, one of the biggest factors behind delivering a better borrower experience and shortening closing times will be access to real time data and machine learning tools capable of making sense of data, which will play a role in the new URLA. Combined, these tools generate new insights about what borrowers need and when they need it. These tools also enable lenders to remove manual tasks and reduce human resources by being able to go straight to the sources of data, which reduces errors that often delay closings.

Already, our industry is starting to use machine learning tools and large datasets to get a closer look at borrower behaviors, including what pages they click on and when, as well as what they “rage-click” on (clicking on a website repeatedly in frustration when it doesn’t do what we want it to). All of these actions create metrics that can be collected, measured and used as feedback to improve the borrower experience both online and with salespeople.

For the most part, the technologies and innovations just described are relatively new—meaning they cannot be found in most legacy mortgage software built on older technologies. The vast majority of these products haven’t been upgraded regularly and have no application protocol interfaces (APIs) that are essential for seamless integrations with third-party systems.

Knowing these legacy systems can work against them, it's important for loan officers to think carefully about whether their lenders could be hindering their ability to provide a good customer experience, especially the type of digital self-service mortgage experience that the growing numbers of millennial and Gen Z borrowers will expect.

The good news is that there are modern technology platforms that are built in the cloud and are much more intuitively designed than the traditional loan origination systems (LOSs). No longer do loan officers and brokers need to scan through hundreds of pages of documentation to figure out how to originate a conventional loan. In most cases, originators can sit down and start using them almost immediately with very minimal training, and often no training at all.

Right now, the biggest impediment to providing a better borrower experience is demand. Lenders that haven’t made significant investments in technology have been forced into hiring more people to keep pipelines flowing. That’s especially true for lenders that had no consumer direct channel and are now spending more resources beefing up their sales teams rather than upgrading their technology.

For some lenders, it’s never a good time to invest in technology. When volumes are low, they don't want to spend the money—and when volumes are high, they don't have time to implement a new platform. With 2020 drawing to a close, however, the lenders that were caught off guard by the current lending volume have now seen the benefits of investing in more modern technologies to create a borrower-centric approach. Some of these lenders will be playing catch up in 2021.

To be sure, the average loan officer doesn't have a whole lot of control over the technologies their lenders use. All the same, there is no turning back from self-service and remote lending going forward. In fact, according to STRATMOR Group, less than 30 percent of lenders offered some form of borrower-centric technology in 2017. Two years later, more than 70 percent of lenders did--and their Net Promoter Scores generally rose as a result. Brokers and loan officers should at least be aware of the modern technologies that are available that can not only help them communicate more effectively with customers, but also shave significant time off the mortgage lending process, which factors significantly into higher satisfaction.

No doubt, technology alone does not make borrowers happy. But with so many recent advancements— such as platforms that are built and reside in the cloud that leverage large datasets, machine learning, automated tasking and mobile capabilities via APIs—creating satisfied customers will be more difficult without it. And as business author Michael LeBoeuf once said, "A satisfied customer is the best business strategy of

Joey McDuffee is a vice president at Blue Sage.