Role of mobile apps in the us mortgage industry

Mobile Apps Set to Revolutionize the Mortgage Industry September 2013 BLOG POST

Role of Mobile Apps in the US Mortgage Industry Predicting future is a tough job, and it gets even tougher when it comes to the mortgage banking industry. With the current unstable global economic situation and slow housing market recovery in the country (US), many things cannot be ascertained. However, one of the few things that are certain is homeowners will always have mortgages to pay off – which means lenders, servicers, investors and brokers must keep finding new means to best serve their borrowers. And in this pursuit, keeping up with advances in technology will help all these players to remain in the fray.

New business models continue to evolve over time as mortgage lenders continue to adopt new technologies and enhanced loan origination systems to streamline their processes. Over the past decade, mortgage lending has changed for the better, with advancement of cloud-based platforms and paperless solutions, which have helped mortgage lenders save time and money, increase profitability and enhance loan production. The next step in progression for mortgage lending is going mobile.

With the whole world gearing towards becoming an unwired society, there is an increasing reliance on smartphones and mobile gadgets to help people through their everyday life. Applications powered through smartphones and tablets, popularly known as Apps, are improving the experience and reliance on smartphones even further. The mobile channel has given a whole new meaning to the

mortgage industry for home purchase and subsequent mortgage-related process.

With the improving penetration of smartphones, and telecom operators offering faster data speed, more and more mortgage buyers are turning to mobile apps for home search and also for managing their mortgage account services. Similar is the case with sellers, realtors, and lenders. With the increasing number of foreclosures, field services companies are struggling to meet the demands of their clients in a timely way. Mobile apps can help meet this challenge by providing them with a range of anytime anywhere capabilities, including order transfer, bid review and order tracking.

Benefits Provided by Mobile Apps Today, mobile apps are proving to be great assets for the mortgage professionals, who are trying to follow up on leads more quickly and keep more appointments with reminders.

Mobile apps for mortgage improve productivity of lenders. They enable field officers of lenders to meet with customers, file paperwork and supply credit stipulation information on-themove. While using a traditional approach, the same task requires parties to spend significant time in a physical office.

According to a National Association of Realtors, 58% of the Gen Y of the US has used a mobile website or application to search for a home. At an overall level, mobile apps assist mortgage lenders in various processes. These apps help in enhancing productivity of their business operations in the following ways:

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Paperwork on the Move

Eye on Detail

Utilization of Cloud Technology

Save Time

Paperwork consumes a significant portion of the time required to sanction or reject a home loan application. Lenders often find themselves occupied in processing these documents, thus limiting their on-field time working on the next deal. Mobile fax application providers like Kofax allow lenders to receive, review, sign and send the documents, thereby, allowing the lenders to better manage their limited work hours. Kofax processes more than 1.1 Mn mortgages, or approximately 374 Mn document pages, in the US annually.

Lenders receive several calls, making it difficult to keep track of the details discussed in every communication. When speaking with clients and agents on the move, a virtual phone system's ability to record and transcribe calls makes it easy to refer past conversations, allowing lenders to expedite deals and close sales at appropriate time.

All the paperwork related to home loans can be uploaded to the cloud and retrieved on any mobile device using the documents storage mobile apps.

Voice-over Internet Protocol or VoIP apps allow lenders to make phone calls using a Wi-Fi connection instead of their carrier's cellular network, thereby reducing the phone bills.

Key Mobile Apps Mortgage apps are similar to other general mobile apps that fall under one of the two established categories: web apps and native apps. A web app is a web site that is accessed by the home buyer or lender using the device’s mobile browser. This means web apps can be used by most devices that can surf the web regardless of the operating system or brand of phone. A native app is installed directly on a mobile device of the home buyer or the field team. Each mobile device needs a separate native app version. The native mortgage app can be stored on the mobile device out of the box, or it can be downloaded from a public or private app store and installed on the mobile device. Depending on the nature of the native app, internet connectivity may or may not be required.

Most of the major mortgage lenders, for instance, big banks, have integrated the mortgage feature in their overall banking app.

However, there are various other third-party application providers whose apps are also popular among buyers, sellers and realtors, and are freely available on leading mobile operating systems. Few of the key third-party apps are listed here with their key features.

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Zillow

Homes.com Instant maps to search nearby homes using GPS Custom real estate searches by filters like price, neighborhood, number of beds, and more

Credit scores and option to complete online home loan pre-qualification application

Calculate loan amount and monthly payment

Key Features

Driving directions to the property of interest

Full-screen photographs of home on offer

Contact relevant real estate agents

Outlook Although mobile apps are emerging as the new communication channel in the mortgage industry, the current proportion of originations through mobile channels is still insignificant.

Hence, a huge opportunity for growth is waiting to be tapped here.

The young generation is learning about technology at a young age, which makes it impossible to continue doing business the way

it was being done in the past. In future, mobile apps will be an enabler for lenders, servicers and mortgagers to reach the newest generation of homebuyers with the most advanced technology to better educate and provide them with an improved experience. Therefore, one thing is for sure that the mortgage banking will stay mobile in the near future, and the best way to keep up with the trend is to adapt to this ever-changing technological environment.

Source: All data from secondary sources; Sutherland Research

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