MReport July 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

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42 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Mortgage Lenders Adapt to Market Realities Data reveals that adoption and engagement numbers are low amid an unstable market and rising rates. A ccording to the June Insights Report from mortgage advisory firm STRATMOR Group, as mortgage lenders adapt to the reality of a vastly changed market focused on purchase loans, adopting new mortgage technology has be- come a priority. In "Light a Fire Under Your Digital Adoption Plans," STRATMOR Senior Advisor Sue Woodard analyzes why there is resistance to technology change and what lenders can do to get their teams to embrace new tools. "As lenders analyze their busi- nesses to address the new reality, a big frustration point is the lack of adoption and engagement with the many technology purchases made over recent years," Woodard said. "The frustration is under- standable. Smart lenders have in- vested in smart tools designed to allow their teams to operate more efficiently, drive more volume with less work, create excellent customer experiences, and bring in repeat and referral business— the list goes on and on." However, as Woodard points out, tools can't benefit the lender if they're not used. Data from the STRATMOR Group Technology Insight Study on Digital Innovations reveals that adoption and engagement numbers are low. And the most often stated barrier to adoption was: "Difficulty of getting LOs to change process and behavior." Lenders must overcome this barrier if they hope to real- ize an ROI from their recent technology purchases, Woodard says. "The time to focus on this issue of adoption is not only now, it is right now," she said. "STRATMOR's Technology Insight Study clearly indicates the benefits of adopting digital mortgage technologies, with speed-to-closing and increased borrower satisfaction topping the list. Notably, enhanced LO pro- ductivity ranks highly overall." Woodard also points out that human nature is at play, and change is hard for people. "As much as we all want to be seen as an agent of change, an early adopter, and a forward thinker, in real life, most humans just don't operate that way. Change is hard, and we naturally resist it in favor of the most powerful force on earth—inertia," she said. Helping loan officers and other employees see that adopting a new technol- ogy will ultimately improve their business and make their lives easier will go a long way toward overcoming resistance. Woodard discourages lenders from discounting or eliminating technology solutions that may not have had heavy recent usage. "Just because your people haven't used them much over the past two years does not mean these solutions are useless," Woodard said. "In fact, these solutions may be exactly what is needed to meet the current challenges." Woodard outlines a number of key recommendations to help lenders, whether they are in the middle of rolling out a new technology or are still struggling with the adoption of technology already in place. Woodard also advises lenders to fully understand why they are making a technology investment. "Plenty of money is being invested in technology, ranging from five percent to even 12% of overall company costs," Woodard noted. "Yet very often we find lenders are unclear on the 'why' behind their investment, as well as the expected ROI. As you make and implement technology decisions, or even contemplate decisions made in the past, your why must be crystal clear." Woodard also stresses the importance of smooth technology integrations. "During the wild ride of the past few years, many lenders acknowledge that they purchased or inherited technol- ogy solutions without enough of an eye towards how all the shiny pieces of technology would all work together. Ultimately, this resulted in some data silos or bro- ken process flows." Yet solution providers have made remarkable progress on technology integra- tions over the past few years, she said, so it may simply require a renewed focus internally to get all of the pieces in place. "No technology out there is a magic bullet that will instantly make your company triple profits, eliminate all waste, and ensure employees and customers are uniformly happy, healthy, wise, and good-looking," Woodard said. "Every successful company implementing technology is doing so with eyes wide open and with realistic goals. This applies equally to hard fiscal numbers, customer experience metrics, and employee feedback tracking." A second Insights Report article by STRATMOR Group Customer Experience Director Mike Seminari, "How Can Originators Empathize with Their Borrowers?" examines the role of empathy in a tough mortgage lending environ- ment. With refinance applications down 75% and interest rates two points higher than the same time last year, lenders will have to com- pete not just on product and price, but also on the emotional elements of their offering. "Emotional connections with both their new and existing customers may well be the defin- ing characteristic that separates the winners from the losers over the coming months, and perhaps years," Seminari said.

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