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Few would argue that technology has made life easier for most all of us–from FaceTime and texting, to mobile banking and online shopping–interactions with businesses and one another have become faster, more streamlined and efficient. Whether you are chatting online or ordering a pizza, technology has changed how we do things. At the same time, we must acknowledge that there are some instances where technology can be a burden, even a detriment, when communicating with other individuals. We’ve all experienced a fully automated phone system that makes if difficult, if not impossible, to speak with a human being. Or, how about a Web site that only offers customer service assistance via e-mail or live chat? What does that say about that company?
The mortgage industry, like all other industries, has certainly benefited from the efficiencies technological advances have made to the lending process. When you consider how things were once done, it is simply amazing that now a significant portion of that process is automated. People inquire about mortgages from tablets and iPhones. They complete paperwork and receive, sign and send documents electronically. And, they can even move through the entire process without laying eyes on their lender–or stepping foot in their offices. But, is a move toward full automation truly a good thing? Is it an acceptable and effective replacement for the mortgage professional-borrower relationship?
How and where technology has enhanced the lender-borrower relationship
While there’s no denying that automating the mortgage process is saving lenders money, time and manpower, the lack of personal interaction that comes with it can cause real problems. With solely an automated connection, a lender’s ability to accurately assess and react to personalities becomes quite difficult. Borrowers, on the other hand, consider their circumstances to be unique to them and expect their lender to understand and appreciate that. When one is trying to convey emotion–be it urgency, concern, confusion, empathy, sincerity, etc., e-mails and texts simply don’t cut it.
Let’s face it, there are some pivotal points in the lending process that require a “high touch” interaction between the lender and borrower. Video conferencing is proving to be a time, overhead, and effort saving tool that is immensely helpful at these critical junctures.
The first point in the process is when a borrower initially engages with a lender. By offering technological efficiency and marrying it with a personal touch, video conferencing can actually improve conversion rates. Borrowers no longer have to leave work, find childcare, and travel across town to a lender’s office for that crucial initial meeting. Instead, that engagement is now often accomplished via video chat. The reasons that force many borrowers to cancel those important first meetings have effectively been eliminated with online meetings. And as we know, if too much time transpires between the first expression of interest and that first meeting, the opportunity is lost. But, platforms such as GoToMeeting and JoinMe have facilitated this process improvement and contributed to the decline of cancellations and rescheduled appointments–and translated to an increase in conversions.
This technology is also particularly effective with first-time homeowners who often need to be taught how the credit and appraisal process work. Video chat accomplishes this quite well as the presentation tools inherent in these platforms are fairly sophisticated.
A second pivotal point in the process is throughout the last phase of the loan transaction. This is when borrowers need to be guided through rebuttals to appraisals, locking the interest rate, home inspection issues, scheduling the timing of closing, the arrival of funds, and taking occupancy. These things can become quite complicated, and are more effectively addressed with the aid of video technology.
The growing use of mobile apps is another technological advance that is changing the industry. Now borrowers can use an app to move through the paperless lending process via their smartphones. They can gather information, review the status of their application and loan approval, and securely scan and send documents right from their phone–without having to attach them to an email. In fact, there is a real demand for this capability among borrowers now–especially Millennials. The improved, more streamlined transfer of information from the lender to the borrower, and vice-versa, will likely make mortgage mobile apps the preferred communication platform among millennial borrowers for years to come.
Win over your borrowers by fostering a personal relationship
There is no substitute for connecting with your clients on a personal level. After all, the loan process can be intimidating and stressful. Chances are, many of your clients came to you by way of referrals. Assuming that’s the case, you obviously brought something positive to the process. So, don’t be tempted to let automation take over your relationships. If you are not already, consider working closely with just a handful of real estate agents. Get to know how they operate, areas in which they specialize, and become their “go-to” lender of choice. You can specialize in certain niches too, becoming a product expert of sorts, which will cause certain borrowers to seek you out. This can be a very effective way to foster relationships.
Then there are the standard rules to live by–attend closings, send personal notes, provide closing gifts, etc. By staying engaged with your borrowers before, during and after each transaction, you’ll be in a better position to maintain client relationships for the long term.
However, in this age of automation, the most important thing you can do is to unite technology with your expertise. Systems are efficient and can be immensely helpful, but they also can fail. Therefore, relying solely on an automated system is not only foolish, but dangerous. Technology can be used to leverage the transaction, but behind that technology must be an expert: you. Your diligence, personal interest and genuine concern cannot be substituted. Remember, a successful, involved lender refers to each of their loans not as a number, but as a name – and one that has a face to it.
Where the industry is heading and what the next decade might bring
As time marches on so, too, will technological advances. There will be attempts to automate the entire loan process simply because the capability exists. Indeed, those attempts have already started. But, just because a procedure can be automated does not mean it should be. While advancements have made our collective lives easier, the sales groups that hold borrowers’ hands cannot be cast aside.
Fannie Mae and Freddie Mac are also making movements toward e-mortgages. Today, when a borrower signs a note and mortgage, a physical signature is required. But, if bonds with electronic signatures become the accepted norm, even more efficiency will be created in terms of the way borrowers interact with their lenders.
In addition, more attention will need to be directed at how to better secure data. Though we’ve made great strides in this area, this is not a one-time concern. Online and information security is something mortgage professionals must continuously address each and every day. Hackers are clever criminals that are relentless when it comes to stealing the data they are seeking. Large scale breaches of personal data simply cannot be risked. As more preventative measures are developed, more companies will successfully ensure their systems are secure.
At the same time, we, as lenders, are in the unique position to help prevent fraud–simply by virtue of what we do. With our daily utilization of fraud detectors, we can identify and prevent attempts at money laundering–inflated assets, fabricated income or employment, and undisclosed debt. And, in the spirit of giving credit where credit is due, automation has helped us stop these attempts much more quickly.
Mortgage professionals should use technology to enhance, not replace, their relationships with borrowers. Despite the industry’s movement toward complete automation, parts of the process will always require a mortgage professional’s savvy and experience. The relationship between a lender and borrower can be enhanced with apps, smartphones and laptops, but there’s no substitute for personal interaction when tricky issues arise or more technical things need to be explained. Knowing when, where and how to use technology is paramount to building your business and attracting–and deepening–borrower relationships.
Chad Jampedro is president of GSF Mortgage Corp. With more than 20 years in business, GSF Mortgage has embraced the next generation of homeowners with its GoGSF brand, continuing its dedication to flexible and transparent lending. They call this: “Lending in Your Favor.” Chad may be reached by e-mail at CJampedro@GoGSF.com.
This article originally appeared in the May 2016 print edition of National Mortgage Professional Magazine.