MReport December 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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Page 19 of 67

18 | M R EP O RT FEATURE Keeping Pace Here's how lenders can remain competitive even as the housing market slows. By Ashley Wood I t's no secret that the housing market is ex- pected to shift. While no one knows exactly what the future of the market will hold, there are ways lenders can help prepare now for whatever is in store. And, a few things are certain. For one, we can likely expect a leveling off of ac- tivity across the board. While it's hard to say what this will look like—and when it will occur—as the mortgage industry emerges from a year character- ized by bidding wars, inflated home prices, and low interest rates, we can anticipate eventual increased interest rates and decreased demand. We also know that consumer demands have changed. Homebuyers expect a fast, seamless, and secure mortgage loan application process that matches today's e-commerce experiences. There's also more competition for lenders—and a growing need for lenders to help facilitate a faster-time-to- close. If the current housing boom has taught us anything, it's the importance of finding efficiencies to more quickly get to the closing table—other- wise, borrowers may risk losing out on a house. If lenders can't get borrowers to the closing table in a timely manner, both the lender and borrower may risk missing out. Faced with an expected leveling off of activity, increased competition, and changing consumer demands, what can lenders do to prepare? As the market flattens, here are a few ways lenders can stay competitive and manage costs: Leverage Verified Data Throughout the Process I n many ways, managing costs in an ever- changing market can be boiled down to lenders constantly reevaluating and challenging internal processes to determine what works best and where technology can be optimized. For example, verify- ing an applicant's income and employment to better help determine ability to pay is a necessary but often tedious part of the loan process. Leveraging automated data provided by employers can help speed up the lending process. With an average loan origination cycle time of 40-50 days—and with more pressure than ever for lenders to facilitate a faster time-to-close—lenders should leverage technologies to improve efficiencies. Some legacy methods for income and employment verification are becoming outdated, and evaluating more data in a compressed time frame demands greater levels of automation. Automated processes throughout the lending cycle, such as real-time income and employment verification, can help boost efficiency and free up internal resources that can then be focused on closing more complex deals with the potential to create more revenue for the lender. Having access to data provided directly by employers—and leveraging automated verifications— can help speed up the lending process as a whole. Further efficiencies can be gained by leveraging data through any part of the process—from as early as the pre-qualification stage to reverifying income and employment prior to close. Some of the fastest and smoothest origination processes verify poten- tial borrower employment as early as the applica- tion stage and check employment again prior to close. Having access to income and employment data early on helps lenders speed up time-to-close by helping to ensure this box is checked possi- bly before the loan even gets to the underwriting process. This helps create a smoother process from start to finish, allowing lenders to make faster, more informed decisions on borrower qualification, help- ing mitigate risk, and cutting down on wasted time

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