TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/113472
feature a na ly t ic s se r v ic i ng or ig i nat ion ANALYTICS said Regis Hadiaris, director of Internet marketing for Quicken. "Now what we're seeing more and more is people are more comfortable with these things." Another major draw to online lending—for both consumers and businesses—is the increase in processing speed from application to close. Mortgagebot's EnterprisePOS system boasts a 20-minute application and approval process, and the majority of Quicken loans close in 30 days or less compared with the average 48 days reported by Ellie Standout Strategies W ith those kinds of numbers, it's easy to see why real estate and lending firms are eager to break into the online arena. Breaking in and standing out are different matters, however, especially in a field where consumers can find tens of millions of search results in a fraction of a second. The first thing to remember, Allen said, is that consumers are still going to be looking for information before they choose finish on another (starting online and finishing over the phone, for instance). "In a tightened mortgage market, lenders who aggressively adopt the online channel through multi-channel integration certainly gain an upper hand by providing the consumer the ultimate in consumer convenience," Allen said in a 2011 Mortgagebot study. "Lenders deploying such a platform can seamlessly transfer a partially completed online application to their call center, branch, or "In a tightened mortgage market, lenders who aggressively adopt the online channel . . . gain an upper hand by providing the ultimate in consumer convenience. Lenders deploying such a platform can seamlessly transfer a partially completed online application to their call center, branch, or loan officer channel to both enhance the borrower experience and increase their application submission rate." S e c on da r y M a r k e t —Rick Allen, Mortgagebot Mae in 2012. (In what is perhaps an acknowledgement of its devotion to speed, Quicken recently announced a partnership to sponsor the Quicken Loans 400, a NASCAR Sprint Cup Series race in June.) The same trends and goals can be found in homebuying, though the concept is younger. Hubzu. com, an online residential real estate marketplace, reported 6.3 million page views in 2012 and an average of nine bids per home sold versus the national average of 3.1 bids. "We've reached a tipping point," said Hubzu general manager Scott Wielar. "It's clear that the Hubzu user experience, shortened sales cycle, and fully transparent process attract more than just the early adopters. We see a vibrant marketplace evolving, as consumers and brokers take advantage of new technology to do more than just research. They are buying and selling homes entirely online." 76 | The M Report a lender and product. He noted that the lender who offers the broadest array of information and the most transparency without requiring extra effort from customers will be the most attractive to would-be borrowers. "Individual lenders will stand out by doing business the right way," Allen remarked. Other than that, the biggest watchword for 2013 is simplification, especially as the application process becomes more involved in the face of regulatory requirements. Just as the earliest online consumers adopted a new way of borrowing, today's lenders face the challenge of adopting new methods and technologies to fit the demands of the modern consumer. To that end, the major ongoing push across all businesses is for "channel integration"—the ability for an applicant to start applying on one medium and loan officer channel to both enhance the borrower experience and increase their application submission rate." As lenders grapple with the Consumer Financial Protection Bureau's (CFPB) new mortgage guidelines, they're also adopting new "smart" application technology designed to change and reflect the user's financial situation and loan eligibility as the form is filled out. The ease-of-application design cuts back on follow-up phone calls from loan officers. More than anything, Hadiaris said the trick for any online lender to succeed in 2013 is to listen to customers and stay in tune with their needs and make sure "the right person gets the right loan at the right time." "I think a lot of it is about taking the platform and continuing to make it as easy, as simple as we can for clients," he said. "We're collecting client feedback all the time." Is the Wait for Prosperity Over? The ongoing recovery has set up certain banks and title insurers to thrive in the coming year, according to one global investment firm. A fter a lengthy waiting period, the housing market is indeed improving, and banks and title insurers are beginning to prosper once again from a strengthening mortgage market, according to Turner Investments, a global investment firm based in Berwyn, Pennsylvania. In a characterization of today's housing market, Turner stated in a recent report, "Like Vladimir and Estragon, two aimless men waiting for the title character to arrive in the play 'Waiting for Godot,' we've been patiently looking forward to the housing industry recovering since its bubble burst in 2007–2008. Now it seems our patience may be finally paying off." With rising prices and disproportionately rising rents alongside historically low interest rates, Turner Investments says a few banks and title insurers are particularly well-positioned to prosper in the changing climate. "We think that, unlike Vladimir and Estragon in 'Waiting for Godot,'" these institutions will begin to thrive "as the play that could be called the New American Housing Recovery enters its next act in 2013," Turner Investments stated. The institutions Turner singles out include four banks and one title insurer: EverBank Financial, based in Jacksonville, Florida; First Republic Bank, based in San Francisco; Texas Capital Bancshares, based in Dallas; Wells Fargo, based in San Francisco; and Fidelity National Financial, based in Jacksonville, Florida. Thus far, however, mortgage lenders have not responded to these positive trends in the housing market with much gusto. They haven't "drastically changed their mortgage-lending standards" yet, but Turner Investments said, "the banks won't be able to ignore and aren't ignoring rising demand for mortgages for long."