It’s always hard to know what the future will hold, and in particular, what the future holds for the mortgage banking industry. With today’s weak economy and slow housing market, the upcoming presidential election and the ever-changing world around us, many things are not as certain as one might wish. However, one thing that is certain is homeowners will always have mortgages to pay off, which means lenders, servicers, investors and brokers must continually find ways to best serve their borrowers. Keeping up with today’s advances in technology is an essential step in the changing process.
Business models continue to evolve over time as lenders continue to adopt new technologies, loan origination systems (LOS) are continually enhanced, and mortgage companies look for new ways to streamline their processes. Mortgage lending has come a long way for both borrowers and lenders thanks to the advancement of cloud-based platforms and paperless solutions for mortgage lenders and banks that save time and money, increase profitability and enhance loan production. But what comes next? Well, the future of mortgage banking is right at arms reach. In fact, it is in your hands … because mortgage banking is going mobile.
Paperless processes have changed the mortgage industry
Previously, the loan process required thousands of loan documents to be printed and physically mailed, or faxed and e-mailed, and the loan transaction process took months. Costs associated with copy paper, toner, printing and postage now seem outdated because of the development of cloud-based electronic document management systems. No longer do mortgage lenders have to send anything through snail mail; every single document can be accessed through the Web, thus generating cost savings and making turnaround times faster than ever.
Paperless solutions have not only provided environmental benefits and convenience to all loan participants, but have also given third-party vendors and multiple people outside the organization the ability to share and access documents for viewing and editing purposes as needed. Not to mention, paperless solutions eliminate the risks of documents being lost in the mail and provide secure document storage. The cloud-based electronic document management system has enabled easy sharing and collaboration for all involved parties to access and edit documents from their computers and laptops; a significant change in the way loans were processed and closed previously with stacks of papers and endless filing.
Moving forward: The next steps
In the fast-paced world we live in, with an abundance of cell phones and tablets everywhere we look, what difference does a cloud-based solution make for mortgage lenders, servicers or even aggregators and real estate professionals if they cannot access these important documents while out of the office? Mobile applications have had a significant impact in the way banks do business during the past few years and are now making their way into mortgage industry. Mobile electronic loan folders are just the beginning of the future of mobile for mortgage banking—the 21st Century solution for the electronic loan folder.
Of course, the paperless solution will continue to bring value to the market and the mobile app cannot survive without its Web-browser or desktop interface counterparts, but the natural next step in this evolutionary business model is to take paperless mobile. What mortgage lender wants the burden of having to find wireless connections and power plugs for laptops at all times to determine the status of loan documents? Not to mention the inconveniences desktop computers create for mortgage professionals who are away from their desk.
Mobile apps are the way of the world today. In a report released by Nielsen in May of 2012, the average number of apps each person has on their smart phone is 41. A modernized mobile app that gives borrowers, lenders and mortgagers an electronic loan folder in the palm of their hand for viewing, status updates and loan information is the obvious next step in the continued evolution of mortgage banking. Apart from keeping up with the rest of the world and gaining a competitive advantage, an app increases revenue and return-on-investment (ROI), further improves service response times, makes compliance with government regulations an easier task and provides users with constant knowledge of the loan transaction status.
Think about a few of the consequences that can occur for mortgage bankers who choose to not participate in moving forward with utilizing a mobile app. For starters, valuable time is lost. More time will be spent behind a desk reviewing current loan documents and less time spent with potential borrowers and sales opportunities, meaning loan transactions take longer and fewer transactions take place. If a loan officer, account executive or assistant is out viewing properties, working while traveling or is continually conducting business outside the office, they are not able to view the loan folder and its status to provide any information to the office or borrower. But with the introduction of mobile, nothing skips a beat. There is no time delay in responses, because the information is in the palm of their hands.
Secondly, if you are not a forward-thinker and accept change with the times, why should borrowers, servicers or investors choose to work with you? You will have a tough time explaining why you are not an on-the-go mortgage professional like the others, which makes the competition as easier choice to work with.
Lastly, you will fall far behind other professionals and hinder the process. Do you not want to provide borrowers with the most recent status of their loan documents and give lenders or servicers an accurate answer when asked about particular documents and their requirements? That is what an app does—it enables users to have constant access to vital parts of the loan equation, wherever they may be. As a mortgage banker, it is your responsibility to be accountable at all times for the loan transaction, meaning you must be able to provide loan participants with timely information that is factual.
Mobility increases business value
In a time when loan volumes are low and a new generation is buying homes, a mobile loan folder gives all loan participants the ability to take the mortgage loan to the next level, which increases overall business value. One of the biggest benefits a cloud-based system provides is a secure platform to work from. Files are constantly backed up so that no important data is lost in the event of a power outage or natural disaster. What about Big Data? These data sets are so large and if crucial information, and mass quantities, were lost it may never be retrieved. And worse, if Big Data were lost and then found in the wrong hands, businesses could suffer. Thankfully, a cloud-based system is secure and makes capturing, storing and searching for important files much easier. With the mobile app, none of the above-mentioned challenges with paper systems are ever an issue. Whatever you may need is right at your fingertips.
Consider the previous way loan documents were stored (in file cabinets) … what an odd concept these days. Now, with cloud-based and mobile document management systems, files are guaranteed to be retrievable the next day, or the next year, and the hundreds of pages of loan documents are in one location. An insurance agent does not have one set of pages, while the closing attorney has others. Instead, the storage location is singular and completely auditable. Long gone are the days of searching and filing. Everybody with access to the loan folder is able to collaboratively work together; improving the communication chain, eliminating paper-based mistakes and increasing productivity all while taking us less space in the office with file cabinets, stacks of paper, printers and fax machines. If that does not increase business value, there is not much that will.
Getting the loan transaction process started is also much easier with a cloud-based system because documents are automatically recognized and converted and gives the user the ability to customize the way they name and file each document. Much of the hard work is done for the user, which reduces time-consuming manual labor and decreases the holding times on particular documents. Now the mobile app allows users to view these documents on-the-go, in the correct order without any conversion issues because files are automatically recognized, allowing the user to leave the computer and carry on with other business.
Reaching new markets
Now that mortgage lending is going mobile and lenders have the ability to utilize a mobile app for viewing and sharing loans documents they are able to reach new markets and accommodate new buyers. It is rare that you find a 20- or 30-something-year-old today who does not have a smartphone or know what texting is. Children are learning about technology at such a young age, it is impossible to continue doing business the way it has been done in the past if you want to keep up with the upcoming generation.
Mobile apps enable lenders, servicers and mortgagers to reach the newest generation of homebuyers with the most advanced technology in the mortgage industry in order to better educate and provide buyers with an improved experience. It is difficult to predict what will happen in the future, but one thing is for certain—mortgage banking is going mobile and the best way to keep up is to adapt to this ever-changing technological environment.
Sanjeev Malaney is co-founder and chief executive officer for Capsilon, a provider of cloud-based document sharing, imaging and collaboration solutions for businesses. He may be reached by phone at (800) 660-7183 or e-mail [email protected]