As a mortgage industry professional, it’s easy to feel wary of the current environment. 2022’s market caused lenders to tamper down their budgets and brace for survival. This year shows signs of cautious optimism so far, but many lenders are still hesitant to invest in growth, and looking into new technology possibilities is far from their minds.
The truth is, though, that now is the perfect time to consider how technology can drive new borrower business, cost savings, and profitability.
Not only can the right technology help you drive down origination costs and increase efficiency in your lending process, but it can drive increased loan volume and help your team focus on high-ROI work. With the right technology, lenders can realize substantial improvements that bolster their business now while also preparing them for the future.
Maxwell, for example, delivers technology enhancements that impact your ROI immediately. Using Maxwell Point of Sale with QuickApply™, which pre-populates a borrower’s application with a few simple questions, lenders see completed apps jump to over 90%, converting more leads and driving a 967% ROI. With the added efficiency, lenders can close 15% more loans and do it 13 days faster.
Donielle Geiser, VP of Operations at Thrive Mortgage, sees the current market as an opportunity to proactively ready your lending business for the coming uplift in activity, commenting, “It’s better to be prepared for when, not if, the volume hits—because it will be a when—so that you’re ready for it and you’re not scrambling.”
While it may seem counterintuitive to invest in technology right now, tenured mortgage professionals realize that once loan volume returns, it’s already too late to put new tech in place. The tools that help you capture market share need to be in place to reap the benefits of the next market upswing. By partnering with providers and setting a strategy to capture loan volume today, lenders position themselves to gain a powerful competitive advantage and strong basis for profitability.
Technology for efficiency & growth
The mortgage industry has long struggled with inefficiencies and cumbersome processes. While 2020 and 2021 saw record-breaking numbers, their sky-high volume and the ensuing profitability lenders experienced masked efficiency issues across the industry. Now, with volume relatively lower, those efficiency issues are brought to light, and many lenders are again turning to technology partners to remain viable against challenges to profitability
The good news is that technology solutions are available like never before. Today, the mortgage industry is working to streamline all facets of the loan origination process to increase efficiency and keep fixed costs low. Automated workflows exist for applications, processing, underwriting, appraisal, quality control, diligence, and everything in between. This technology can remove friction in your process and even open options to new product offerings without drastically shifting your personnel. Instead, you can use available technology to make the most of your team, reduce fixed costs, and increase loan volume. What you decide to integrate into your own process can differentiate you among stiff competition and impact your profitability.
Crucially, modern mortgage technology helps lenders attract and convert borrower business, allowing your business to tap into new opportunities as loan volume returns. Economists and industry experts predict that 2023 will see the beginnings of housing market recovery. For lenders to hit the ground running and capitalize on growing activity, they need technology-forward tools that help lenders connect with new audiences and nurture those borrowers through the mortgage process. That means employing a point-of-sale solution built for today’s borrowers and lending teams. Maxwell Point of Sale, for example, features a Spanish-language loan app, offering a fully-translated loan application from landing page to submission. This functionality allows lenders to better serve the growing Hispanic American population, slated to represent an estimated 56% of all new homeowners by 2030.
Things to consider
As you consider new technology offerings to drive efficiencies in your process, you have to look inward at your own business first.
- What tech do you need?
- What tech will your team actually use?
- What do you expect to gain from the tech?
- Do you have the bandwidth to implement properly?
Asking and answering these questions is crucial to your decisions and to any successful adoption of new technology.
Bob Groody, Maxwell’s SVP of Mortgage Operations, suggests taking a deep look at your existing processes to determine what problems you need to address and what works for your business when it comes to technology.
“You have to ask ‘why does it take so long to do this task?’ And then you look for a solution that actually fits the way you want to operate with your sales culture as well as your customers,” he notes.
Technology and its application is not a one-size-fits-all solution. As Bob mentions, the technology has to fit with your company and your culture. This can also apply to the expected return on your investment. It’s important that you have a specific goal in mind when adopting new technology to go along with a realistic expectation of what it can do. More than simply what a vendor says it could do, you need to factor in your own strategy and business goals to determine the efficacy of investing in technology.
In addition to a realistic expectation of a technology’s output, you also must understand your capacity to implement a new technology. This means knowing your IT staff’s ability to integrate a new product within your tech stack to allow for full adoption. It also means knowing the total time it will take to integrate and the ease of the integration.
If you are looking for a technology solution that you can use now to generate immediate return, you need to make sure that both your IT team and your vendor are on the same timeline and that said timeline fits within your strategy. You should also explore the provider’s integrations to ensure any new tech solution works within your tech stack so that it is an enhancement and not a hindrance to your workflow. An open and thorough understanding of implementation time and intensity is essential to set clear expectations for all stakeholders.
A new tool that goes unused, for any reason, is a waste of money and may cause hesitation when it comes to further tech adoption. Therefore, change management does not stop at the IT team. You need to ensure that your people will actually use it the way you intended.
One way to do this is to develop an engagement strategy that involves your front-line employees who will actually be using the new solution. Rather than a top-down approach to push a new technology onto your teams, developing champions within your teams who will advocate for the new solution and demonstrate its usefulness can spur adoption throughout your organization.
Finding the right partner
One issue that arises with new technology is finding the right piece that fits your strategy and needs. Instead of an exhaustive search for a new vendor, ask your current partners what more they can offer. They may have the perfect solution to suit your needs. Expanding a relationship with a partner you already work with and trust removes unknowns such as integration capability and culture fit between the two companies. This simplifies your due diligence and can facilitate a smooth adoption.
If you don’t already have the right relationship, look for a new partner that may suit multiple needs. Finding a partner that can support multiple facets of your business can revolutionize your entire process. Maxwell, for example, provides technology and outsourced support throughout the origination process and post-closing, with a full suite of point of sale, processing, underwriting, diligence, and secondary marketing services. Ultimately, leveraging a partner that will support you and your borrower experience is the partner you need.