TECHNOLOGY and the CHANGING FACE of MORTGAGE LENDING The downturn in the mortgage lending market around a decade ago resulted in financial regulators imposing strict requirements on borrowing. New technology has been crucial to ensuring operations run smoothly, however as Joshua Hebert, Senior VP and CIO of Highlands Residential Mortgage explains, rather than being a hindrance, this has turned out to be a win-win for the industry
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T
he downturn in the mortgage
was like buying a car,” he says.
lending market around a
“You sit in front of someone and
decade ago resulted in
fill out reams of paper, but now a
financial regulators imposing strict
consumer completes an online
requirements on borrowing. New
application, and provides all of
technology has been crucial to
the necessary information to us.”
ensuring operations run smoothly,
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On a broader scale, it enables
however as Joshua Hebert, Senior VP
the organization to operate with
and CIO of Highlands Residential
more flexibility in a fluctuating
Mortgage explains, rather than being
market. “There is a constant
a hindrance, this has turned out to be
disruption where volume goes up
a win-win for the industry.
and down” Hebert explains. “It’s
Highlands Residential Mortgage,
cyclical to some degree due to
founded in 2010, has seen explosive
the timing throughout the year
growth in the last five years. To help
when people buy their homes, but
manage this the organization reached
you have to utilize technology to
out to Joshua Hebert, who has over 15
make it very flexible, especially in
years’ experience in mortgage banking.
cost. The old days of buying a
The financial crisis of the late nough-
solution outright and trying to use
ties brought with it increased regulation,
it over the next three to five years
but Herbert explains that this has in fact
is not as prevalent anymore. Now
lent itself well to technology. “Now we’ve
it’s like leasing technology, you’re
got to put all these requirements in
paying either per unit or per seat
place, what better solution is there than
and a lot of times those contracts
technology to do that?” he explains. “It
are written in a way that’s very
created a level playing field amongst all
flexible, so if your company grows
the companies in this industry, because
the technology and the cost grow
now everyone has to operate in the
with it, if the company downsizes,
same way.”
the cost comes down.”
It has also transformed the experience for customers. “For many years it
As a result, Highlands has switched from CAPEX (the
capital expenditure model) to OPEX (the
“where they ultimately manage,
operating expense model), where they
service and support all of those
pay-per-site and employee rather than
types of technology for me so
paying upfront costs.
I no longer have to, from a
To support this change Highlands partnered with Computex, an IT solutions provider
strategic standpoint.” “From network to voice to
headquartered in Houston, Texas. Hebert
cybersecurity to technology
explains that Computex took Highlands’
support, all of it has been
infrastructure and support needs, which were
enhanced” he says. “We had
mainly centred around a traditional IT
support from 9-5 before, now
structure, including the voice, network and
we have it 24-7. We did it in
subdirectory, and helped transform it into a
such a way that I didn’t have to
managed service provider (MSP) model,
hire a whole bunch of people to 05
“ The amount of effort, time, communication and collaboration we go through on every single loan makes us different” — Josh Herbert, Senior VP and CIO of Highlands Residential Mortgage
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maintain it because ultimately, we’re using a managed services provider to do it. We’re able to build the model out to its predictive cost, whereas in the past, when we would do a proforma to see if a particular branch location was going to be profitable based on how we do business, they would always come up with an arbitrary number and it was very difficult to determine the total cost of technology for that location.” Computex use the most up-to-date technology, allowing Herbert and his 06
team to focus on the more strategic aspects of the business. “Things that are very industry-specific like the consumer experience and fraud, areas that are ultimately going to drive the business forward, that can bring in additional volume for the organization.” In terms of fraudulent activities, new regulations have weeded a lot of these out, however issues like phishing and fake pay stubs still occur because of how easy it is to create bogus payslips. “But there are a lot of solutions that can analyze these and make a phone call to the employer to validate whether that pay stub is truly accurate and that person really does work at that organization,” Herbert explains.
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While interest rates may be high,
differentiator. “We are very nimble so
making property buying less afford-
consumers are coming at us with all
able, and the market as a whole has
kinds of different scenarios. It could
slowed down as far as mortgage
be their credit or the timing in which
applications go, Highlands has had a
they need to get their loan done. We
record year of growth. Hebert
are able to support someone closing
explains that what sets them apart
a loan in as little as 10 days if that’s
from their competition is their cus-
what is needed, when most of the
tomer service. “The amount of effort,
larger organizations take between
time, communication and collabora-
25 and 60 days.”
tion we go through on every single loan makes us different,” he says. He also cites their agility as a key
In addition, Highlands was named as one of the 50 best companies to work for in 2015 and 2016. Hebert puts this
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“ We are able to support someone closing a loan in as little as 10 days if that’s what is needed, when most of the larger organizations take between 25 and 60 days” — Josh Herbert, Senior VP and CIO of Highlands Residential Mortgage
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HIGHLANDS RESIDENTIAL MORTGAGE
“The old days of buying a solution outright and trying to use it over the next three to five years is not as prevalent anymore” — Josh Herbert, Senior VP and CIO of Highlands Residential Mortgage 10
down to being a small, independent
and challenge each other. We’re all
organization. “We’re not bank-owned,
about supporting our employees.”
we’re a family-oriented laidback
Since Hebert joined Highlands in
company, so from a cultural stand-
2016, he cites his biggest achievement
point we’re not constantly breathing
as revamping the organization’s IT
down your neck. We don’t just talk
operations. “Overhauling the infra-
about leadership, we live it. We are
structure was very much about our
very much about hiring qualified,
internal employees, and we needed to
quality employees who can get the job
build that foundation. Now we have
done with little to no micromanaging
that in place we can go out and put
in a heavily regulated environment
these strategic technologies in, that
where you have to know your stuff, but
will ultimately bring in additional sales
at the same time we like to have fun
and loans.”
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12001 N. Central Expressway, Suite 750, Dallas, Texas, 75243 USA T +001 469-402-1200 www.highlandsmortgage.com