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M R EP O RT | 19 COVER FEATURE you implement these technologies," Aach said. He also notes that "inertia" is another contributing factor. "People get used to doing things the way they've always done them. When volumes are soft, the pain goes away, and people forget. When volume spikes up again, they go, 'Oh, I should have done that before.' We heard a couple of clients last year say, 'I'd really like to replace my technology, but I'm too busy processing loans.' If they had done that when things were a little slower, they'd be in a much better spot this year." "For an industry steeped in history and comfortable with its ways, change is tough," said Muthu Srinivasan, CTO for Planet Home Lending, LLC. "However, with the focus on paper reduction and the GSEs getting on board with fully electronic processes, including remote notary options, tech adoption in the industry has had a marked improvement in recent years." In addition to all of the tech being utilized out of necessity during the past year's shift to social distancing and remote work, Srinivasan notes that "lenders are becoming more familiar with adopting electronic verification of employment, assets, and income coupled with streamlined ordering of necessary services and intelligent automation of repetitive processes to improve our turn times." Nevertheless, moving innovative thinking beyond just the front end is crucial if lenders are determined to set themselves up for sus- tained—and sustainable—success. "There's only so much efficiency you can gain by automating the customer-facing piece of it," Aach said. "And many of the popular customer-facing platforms don't do a lot to improve the underwrit- ing process. They don't do a lot to improve the closing process." As for Srinivasan, he doesn't necessarily agree that it's an either- or situation, pitting customer- facing front-end processes against operational back-end ones. "I believe in focusing on cus- tomer experience as the backbone for everything we do," he ex- plained. "If we improve turn times through better process automation (RPA), it can lead to improved lender associate experience. It will translate to a better customer expe- rience at the end of the day." Aach also points out that one of the key things that happens during the life of a loan is that, simply, things change. "Appraisals come in low. Borrowers ask to increase the loan amount, and they find out that certain conditions need to be satisfied. In many cases, they then have to reclose the loan. That's a manual process for a lot of lenders, as opposed to having an automat- ed process for repricing the loan, recalculating the fees, regenerating the disclosures, rerunning compli- ance, and rerunning automated underwriting." Finding ways to automate parts of that process where possible can streamline things and save on labor. "Identifying where the labor-bar bottlenecks are and then imple- menting technology solutions that automate functions that today are still being done by people is criti- cal," Aach continued. "Many com- panies are still manually scanning documents. They have disclosure desks that are checking the docu- ments. Those things shouldn't be manual anymore—if you have the right technology." "When it comes to things like processing of the loan, you need to identify, quickly, are all the documents here?" Galiano said. "Do I have a complete file that I can submit it to an underwriter now and have them be able to make a lending decision? If they don't, then don't send it into an underwriter. It's about putting those stops in place so that you're not utilizing your most expensive resource—the underwriter—only to have the underwriter have to send it back because it's not ready to be reviewed." "Having automated fees is abso- lutely critical," Aach suggests. "If you've got people typing in loan fees, transfer tax fees, recording fees, and origination fees, as op- posed to them being automated, calculated, and then recalculated when anything about a loan changes, that's a big one." Likewise, the use of automated conditions is equally important, Aach notes—"having the ability to automatically define which loan conditions apply based upon loan type, property type, or ownership type would be another one. "If somebody asks a borrower for a W2 for 2020 and it is pro- vided, the system should be able to automatically recognize that, extract the income information, and not have a whole lot of labor associated with that," Aach said. Srinivasan also suggests that the mortgage lifecycle is filled with areas ripe for innovation. "Secondary markets and servicing, for example. It's refreshing to see automation and machine learning, along with blockchain-based solu- tions showing up in the second- ary mortgage world these days. However, we are still in early days when it comes to innovating the industry's post-closing areas." "Whether it's through automa- tion, outsourcing, or process im- provements within an organiza- tion, you need to make sure that, through every step of the way, the right thing is taking place before it moves on to that next step," Galiano suggested. "It's just making the process smoother, start to finish, with the least number of hurdles. Making this smoother will start a domino effect through the entire pro- cess." . DAVID WHARTON is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in journalism. Wharton has over 16 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. "The big challenge is to set expectations with the borrower and then meet those expectations. … When lenders fail, or when it takes too long, it dramatically and negatively impacts borrower satisfaction." —Jim Cameron, Senior Partner, STRATMOR Group