MReport May 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

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34 | M R EP O RT FEATURE W hen I founded Roostify in 2012, I was on a mission to help lenders create more consumer- friendly experiences for their home lending products. As a first-time homebuyer in the digital age, I was appalled by the lack of a consistent, transparent digital experience when getting my first mortgage. Ten years later, just having a digital consumer experience is no longer enough to keep up with expectations. Consumers, particu- larly first-time homebuyers who are unaware of the hassles of the traditional lending process, will expect an experience in line with their other online transactions. Proactive, friction-free, and per- sonalized. So, the root problem lenders need to solve remains the same as 2012. However, consumer expectations have grown expo- nentially as digital experiences have increased dramatically in quality, ease, and speed over the last few years. Lenders need to think of their home lending channels as an opportunity to differentiate themselves, especially as we look to a compressing market in 2022. As competition for the consumer increases, a sleek and sophisticat- ed digital experience is, of course, critical. Still, with advances in data and analytics, lenders have an opportunity to go further and delight their customers. Essentially the mortgage pro- cess, as it stands today, is about lenders answering questions to assess risk and ensure the salabil- ity of the loan on the secondary market. Digital advances over the past 10 years have taken that list of questions and allowed them to be asked and solved on an online platform, reducing operational burdens significantly and only slightly improving the consumer experience. But at the end of the day, a digital 1003 is still a 1003, which doesn't offer a significant improvement from a customer's perspective. Think of it the same way as a paper job application. An online version removes a few irritations, i.e. "I can apply from anywhere," but it also adds a few more points of friction, i.e., "I need to create and remember a username and password." Simple improve- ments like browsers being able to save and autofill basic informa- tion or data imported from a resume uploaded make a real difference. But the experience continued to evolve, and new platforms like LinkedIn lever- age existing digital data to offer a "one-click-apply" for employers. Taking this example one step fur- ther, platforms like this now use available data about job seekers to proactively share highly personal- ized opportunities automatically. This type of evolution may seem distant for the far more complicated mortgage industry that is still struggling to get an end-to-end digital experience implemented. Still, with the consistent and opportunistic investments in data and analyt- ics to understand potential and active borrowers, it could be right around the corner. I visualize a version of our industry where lenders send pre-approvals to consumers before they even know they are looking to buy, refi, or take out equity. Lenders should start preparing their tech stacks now to make sure they have the flexibility to personalize the process for their customers. Unlocking More Consumer-Friendly Lending With Behavioral Data T he goal of the mortgage pro- cess is to make data-validated decisions. Today that data is basic, captured inefficiently, and doesn't tell a complete story about the bor- rower, their property, or their situ- ation. For the most part, lenders are capturing only the data needed to answer the questions required by their underwriters. Some of it comes from integrated sources, some from the borrowers, some manually entered. Still, all of it focuses on what the lender needs, none focused on improving the overall experience for borrowers. With the rise of digital lending platforms, lenders should monitor user behaviors to improve the experience in real-time. Then, further analyze that data in ag- gregate to optimize their lending channel strategies and workflows. A deep understanding of how their customers interact with their lending process and making strategic decisions based on that understanding can deliver a sig- nificant competitive advantage. Keeping Up With Consumer Expectations Behavioral analytics are the key to a customer-first home lending strategy that scales. By Rajesh Bhat

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