TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1345021
26 | M R EP O RT FEATURE time to better understand when the consumer simply wants to tap into an app on his phone … versus when he wants a cred- ible explanation for something he doesn't understand. And let's be honest. There's a lot to the mortgage transaction that most consumers don't (and shouldn't be expected to) understand. Trusted Advisors L et's take, for example, mort- gage insurance (MI), which empowers homebuyers to become homeowners when, in the past, they might not otherwise have qualified. And yet, according to multiple consumer surveys in 2019, most borrowers don't under- stand the need for MI, and some even have a negative first impres- sion of it, and what it means for them, as well ("Surprising Survey: What Consumers Would Change About the Mortgage Process," Gina Pogol, HSH.com; October 9, 2019). Many mortgage lenders long for the opportunity to be the "trusted advisor" in the mortgage process. And yet, it often falls to mortgage brokers or real estate agents to explain what MI is and why it can actually be a good thing. Too often, the automated option fails to answer the multiple questions most consumers have about something like MI and reassure them as to their overall transaction. How about potential homebuy- ers just starting to peruse their options? Far too many AI options out there right now offer sooth- ing, but far too general, reassur- ances that just about anyone can get a home loan. And yet, people still don't trust marketing mes- saging (which far too often fuels AI moderated Q&A segments on lending websites). A Fannie Mae study ("Consumers Continue to Overestimate Mortgage Requirements," June, 2019) con- cedes that "Although the usage of online sources of mortgage information is becoming more common among consumers, they still overestimate the minimum credit score necessary to qualify for a mortgage; overestimate the minimum down payment neces- sary to qualify for a mortgage; and remain unfamiliar with low down payment programs." The study also observes that "Current sources of mortgage education and information are in- sufficient." The copy is there. The marketing materials are out there. And yet, although it feels like we inside the mortgage industry have been talking for years about how easy it is for almost anyone to get a mortgage, it's fairly clear that our marketing materials, chat bots, and call centers are not getting that message through. Is it that the message is unclear? Or is it that people don't necessarily trust scripts, marketing messaging, and automated reassurance? Again, this is not an assertion that AI or automation has no place in CX. Far from it. But it hasn't been executed all that well in its early days in our industry. It will improve. But it appears consumers don't instantly give a lot of cred- ibility to that AI assistant when they have questions—especially when the answers don't always fit the questions asked. Could it be that we've caricatured home buyers (especially millennials or other younger, first-time homebuy- ers) as to their desire for an "online transaction?" Could it be that they want something faster; more efficient and more … rational; and yet, want a knowledgeable human being they can trust to fill in the gray areas or "what-ifs" as they prepare to make the biggest invest- ment of their lives? It's a truly marvelous thing to see our industry beginning to embrace the digitizing of an otherwise convoluted, siloed, and disjointed process we've defended for decades. But let's not throw out the baby with the bath water. This is still a personal transaction and a relationship business. Let's be smart about where and how we automate the process. . As CEO of LodeStar Software Solutions, JIM PAOLINO manages the day-to-day operations as well as overseeing business development and the long-term strategic direction of LodeStar, which develops loan estimator, sales management, and closing portal technology. He is also a founding partner for Mortgage Sentinel, a secret shopping service that empowers mortgage lending companies and banks to ensure their loan officers are delivering compliant, effective service to potential borrowers. He has a decade of experience developing software solutions specifically for the mortgage and title insurance space. Paolino speaks frequently on technology trends as they relate to compliance, operational efficiency, and sales growth. He can be reached at jpaolino@lssoftwaresolutions.com. The mortgage transaction is, at its heart, a personal transaction. As we digitize and automate, it's important that we not automate that personal touch right out of the equation.