TECH ROI LAGGING
Even after they’ve been approved, 31 percent of pending borrowers said they continued to shop for a better rate.
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s a follow up to previous columns, the Stratmor Group says that while lenders have been buying and installing the latest technology “at a record pace,” they are not yet getting the biggest bang for their bucks. In 2016, retail lenders spent less than $400 per loan on technology, the Greenwood Village, Col.-based advisory firm says. But that figure just about doubled in the first half of 2020. “Lenders ramped up with more people and pushed harder on technology, buying and installing at a maddening pace,” says Senior Partner Garth Graham in the company’s latest Insight Report.
Nevertheless, its suggestion rings true. To capture customers and deter them from shopping around, engage in a form of “couponing.” Not the buy one, get one free variety, because they only want one loan. Rather, promotional pricing, say an offer that expires at the end of the month or one that appeals to their particular age group or sex. Gimmicks don’t seem to cut it, though. Special non-price incentives offered by the lenders were important to only 8 percent of the survey respondents. “You have only one shot, so make it your best,” said Joe Zeibert, the company’s managing director of global lending solutions.
NON-STOP COMPARISONS
mentioning from the Nomis report: * People don’t seem to have as much faith in newcomers to the mortgage business. Asked to rank a wide range of loan providers, conventional lenders – national and regional banks, community banks and credit unions – scored higher on the trustworthiness meter than online lenders. * Access to live human “experts” is still important to a minority of borrowers. Most applicants prefer a mix of digital and in-person applications. But 20 percent want a head-to-head meeting. Digital, however, is the preferred means by which people want to submit such key documents as pay stubs and tax returns.
But even after you’ve made your best offer, even after a borrower decides to apply with you, it doesn’t necessarily mean he has stopped looking around for another. Even after they’ve been approved, 31 percent said they continued to shop for a better rate. And 41 percent said they’d actually change horses in midstream if something better came along. “Why not?” the study remarks. Why not, indeed! A couple of other takeaways worth
Lew Sichelman is a contributing writer to National Mortgage Professional magazine. He has been covering the housing and mortgage sectors for 52 years. His syndicated column appears in major newspapers throughout the country. He also has been the real estate editor at two major Washington, D.C., dailies and spent 30 years on the staff of National Mortgage News, formerly National Thrift News.
But while they are spending big money, they’re not yet achieving max dinero in return, according to Graham, who noted that only about half the eligible users are adopting the tech tools pushed their way. “Lenders are rushing to deploy the tools,” he says. “They are spending money on technology but are struggling in terms of adoption.” One of the top technologies added by lenders last year was to support electronic closings. But eClosings failed to advance in the way many expected. “Instead, we saw hybrid eClosings experience the highest gains,” Graham reports. Hybrids, which the Stratmor exec claims “is a safer process and offers a substantially improved experience for the consumer,” increased by 25 percent. Part of the slow implementation rate has to do with getting the new tools installed, configured and ready to go. But the biggest roadblock is people. “Good technology implemented well is the goal,” Graham says. “But lenders must focus on the humans in the equation because they will account for 90 percent of the cost.” – Lew Sichelman
NATIONAL MORTGAGE PROFESSIONAL MAGAZINE |
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