MReport October 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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24 | TH E M R EP O RT COVER STORY mortgage application earlier this year transformed TD into a 24/7 mortgage business." As a result of the digitization, a significant percentage of TD Bank's digital applications today are submitted outside of its daily operating hours. Bechtel added that, as a bank lender, TD Bank can effectively partner with fintechs in order to build a customer experience that couples state-of-the-art technology with a highly specialized team of trusted advisors who have been im- mersed in the business for decades. "We believe this combination is the right recipe for serving customers, and the growth of our business continues to prove that," Bechtel said. One of the biggest differentia- tors that have pushed traditional lenders to take quick steps towards digitization is the advent of the smartphone. Today, most lenders have mobile apps that allow cus- tomers to not only carry out their banking transactions online but also apply for a mortgage or refinance loan. Giving the example of its app, John Schleck, SVP of Centralized and Online Consumer Lending for Bank of America, said that the bank has built an integrated mobile app that also allows consumers to apply for mortgages or home equity financing at the press of a button. "A few years ago, you probably didn't think about how you were going to use your smartphone to deposit a check," Schleck said. "Today, we deposit more than 12 million checks a month using this method. We tried to bring some of that experience and ease to the mortgage experience through the app." That app has been designed so that a borrower can start the process online and have the option of filling it at their own pace. The bank's app also pre-populates most of the information so that the customer needs to fill only about 10 fields, Schleck explained adding that a customer can also import assets and allow the bank to get their income and work verified at the click of a button. Digitization has become a neces- sity as more and more lenders adapt to changing consumer preferences. "Clients have more information than ever before at their disposal, in large part due to technology capabilities, and they know what they want and what they should expect," said Sherry Graziano, SVP, Mortgage Transformation Officer at SunTrust. "Clients want 24/7 access to their loans, real-time updates, digital signing capabili- ties, auto form completion across platforms, and intuitive tools. They want the ability to be 100% in control and the opportunity to be 100% led through the process with the ability to toggle back and forth as needed seamlessly." Technology has also benefited other stakeholders in lending. "When used in the right way, technology can lower the lender's cost, give customers a better experience, and provide investors with a higher quality loan file," said Colin McCormick, Head of Product and Innovation for Chase Home Lending. "With all the key stakeholders seeing a benefit, we see the trend of increasing technol- ogy in the industry continuing." "We've seen that when borrowers fill out their own forms and upload their documents online, it reduces information intake time by more than 60% on average. That's good for our call centers, for our loan offi- cers, and for our customers," Bechtel said. "It allows our loan officers to spend more of their time provid- ing expert guidance to homebuy- ers, which is a cornerstone of our value proposition as a lender." Graziano stressed on the impor- tance of having the right tech tools to help lenders streamline their processes. "At some point, every company must ask themselves, 'How can we become more efficient?' By imple- menting the right tool in the right stage of the journey, lenders can reduce cycle times, deliver better client experience, and improve efficiency," she said. She provided the example of SmartGUIDE, a point-of-sale platform introduced by SunTrust that allows clients to upload documentation and complete their mortgage applica- tion digitally, cutting down the application time in half. But why only the loan pro- cess? Technology is creeping into the business of homebuying and selling too. Fintech startups like Opendoor and Offerpad are look- ing at partnering with consumers, whether it's first-time buyers or homesellers, from the time they decide to buy a home right up to the point they actually own one. In fact, iBuyers—real estate compa- nies that buy homes from sellers who sign up online by making an offer after receiving a description of the property from the seller—are looking to become one-stop shops for buyers' needs. The Rise of iBuyers i Buying is often mistaken for just another version of home- flipping. Real estate consultant Victor Lund noted in a recent report by Curbed that the service provided by iBuyers "boils down to a financing instrument. The companies essentially extend a line of credit to a homebuyer using the existing property as the collateral. Customers then use that line of credit to buy a home." Today, the use of technology has made it easier for iBuyers to consolidate and expand operations. Opendoor, for instance, not only buys and sells homes but has also launched a home loan business and partnered with homebuilders so that it can provide "an end-to- end experience where you can buy, sell, or trade-in a home in just a few clicks." According to Nadia Aziz, Head of Opendoor Home Loans, "We are rebuilding every component of the real estate transaction to make it automated, frictionless, and low cost. We've invested heavily in technology and are working every day to make the transaction faster and easier. We've developed a world-class pricing model that leverages machine learning and ad- vanced algorithms to ensure sellers and buyers get the most accurate price possible for their home." Another giant in the iBuyer space, Zillow is also using technol- ogy to give buyers and sellers an easier, more streamlined way to buy or sell a home. The company, which began as a real estate broker- age firm, has now expanded its business to not only include iBuying but mortgage operations as well. Its iBuying business, which is con- ducted under Zillow Offers, helps buyers and sellers to streamline their way to buying and selling a home. "Zillow is already the starting point for many Americans' home shopping experience, and we have "We are rebuilding every component of the real estate transaction to make it automated, frictionless, and low cost. We've invested heavily in technology and are working every day to make the transaction faster and easier." —Nadia Aziz, Head of Opendoor Home Loans

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