MReport January 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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28 | M R EP O RT FEATURE A t the end of every year, it's human nature to look back and see what went right, what went wrong, and what could use some improvement. But 2020 was no ordinary year, and the number of lessons lenders can potentially take away from the past nine months alone would fill several books. But if we learned anything this past year, it may be that most lenders thought they were a lot further down the path to creating a digital mortgage experience than they actually were. In fact, a lender's overall approach to technology proved to be a real differentiator in how well they did this past year. It will likely be the case in 2021 as well. The key is understanding how. Lessons Learned T o be sure, every lender has struggled to adjust to sub-3% interest rates and the global pandemic. But their fates varied widely. Those that had the foresight to invest in more cloud- based digital technologies prior to the pandemic were in a much better position to handle the enor- mous spike in borrowers looking to refinance, as well as shifting their own businesses to a remote work environment. Many others, however, were caught flat-footed. Those that found themselves in the latter group typically found it necessary to beef up their sales and underwriting teams rather than upgrade their legacy technologies, which inevitably impacted their profitability. Even with larger teams, though, many still struggled because they lacked the ability to streamline work- flows, increase efficiencies, and reduce closing times—capabilities that come with more modern mortgage production platforms. Shifting to remote work when social distancing protocols went into effect only made matters worse. When branches closed and borrowers could no longer meet loan officers in person, many lenders were left scrambling to adjust their operations and to find new ways to attract and maintain communication with borrowers. While nobody could have predict- ed what happened, lenders that were tied to a centralized location were caught completely off-guard. Some lenders didn't even have work-from-home procedures and tools to be able to transition to a distributed workforce and had to implement them on the fly—while simultaneously trying to keep up with volume. Hopefully, by now, every lender has a much better idea of how valuable cloud-based technolo- gies are that enable their teams to work from home as well as enable borrowers to handle much of the mortgage process themselves— through online applications, eSignatures, and hybrid or full eClosings. Because the need for these technologies won't go away when life returns to some sense of normalcy. A Permanent Digital Shift W hether some lenders return to the same brick-and-mor- tar strategies of the pre-pandemic era remains to be seen. But what is clear is that consumer behav- iors have likely been permanently changed as a result of COVID-19. To some degree or another, every U.S. consumer is relying on technology and self-sufficiency in their daily lives more than they ever had before. This has affected many industries, not just the mortgage business. For instance, few consumers used delivery services such as DoorDash and Instacart prior to the pandemic. Now it feels like everyone is using them. While the end of the pandemic may cause many con- sumers to revert back to in-person dining and shopping, these new digital businesses were already growing before the pandemic, and it's hard to see that growth slow- ing down. Most lenders have now realized they will be significantly more dependent on digital technology in 2021 and beyond. Even without a pandemic, providing borrow- ers with automated, self-service options has become increasingly important for mortgage lenders. These options will become even more vital in 2021as more millen- nials and even Gen-Z consumers enter the housing market. Lenders that had the foresight to prioritize digital technology Capitalizing on the Digital Push What lessons were learned while fast-tracking digital trends into permanent solutions, and will lenders be prepared for what's coming next? By Joey McDuffee

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