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Maintaining Human Connection in the Digital Loan Process

Leif Boyd
Nov 29, 2016

As professionals in the mortgage industry, we must not lose sight of the fact that the human connection and how we deliver the consumer experience is critical. Despite all of the benefits that technology provides, the mortgage consumer will always need to be able to connect to their loan officer one-on-one.

Technology, particularly mobile technology, has forever changed the landscape of human interaction. Consumers are constantly looking online for ways to interact through media, applications and smartphones. In terms of the loan process, loan officers should respect that today’s consumers wish to use technology to self-serve. For example, digital apps now feature loan calculators that allow homebuyers to immediately determine what their monthly payments would be on a home loan. Some apps provide for real-time status updates for all parties engaged in the loan process. These are very positive tools that the industry needs to adopt and utilize, all while understanding that apps will never replace human interaction.

To illustrate my point, let's look at another industry. Take tax preparers; if you analyzed 1,000 people filing their own taxes through an online medium or app, what percentage of them would get a better return by going to a professional? That percentage is probably fairly high. A tax preparer is going to know how to package the information and itemize deductions in a certain way to get the highest refund possible. This would come as a result of having a simple conversation with their client.

In our industry, a mortgage professional can ask questions about the financial goals of a mortgage consumer, and they can ask about how they earn income and explain the time frames of the loan process. More specifically, a loan officer may ask the homebuyer, "Do you plan to live in this home for 30 years? Or are you looking at this as a fixer-upper to sell in three years?" Depending on their answer, the loan program that might be best suited for them for what they are trying to accomplish couldn’t be automatically delivered through an app.

If a mortgage consumer tries to completely self-serve using digital technology they will risk skipping this critical consultation from a professional. Though some apps or technology try to fill every void, human communication can’t be duplicated.

This can even apply to something simple as someone who makes $60,000 a year accidentally putting down that they make $60,000 a month; or incorrectly entering other sources of income. The human eye of a loan officer is valuable. There are a lot of data points in a mortgage application, and if a mortgage consumer tries to do it completely on their own using technology, there’s a risk that they might be denied for a loan that otherwise would have been approved.

Guiding people through the loan process is a skill set. As a matter of fact, packaging files and getting loans to close on time is an art form. The percentage of loans that sail through easily is a small number. In fact, few loans go according to plan, especially when you have sellers on one end, realtors on the other, inspections, and appraisals—all these elements that need to be brought together by the loan officer who acts like a general contractor throughout the whole transaction.

So what is a loan officer to do to find the right balance in today's digital world? I offer these three tips:

1. Embrace and understand digital technology: Technology is here and it's a fast-moving train. You either get on board or risk getting left behind for good. You could sync yourself with customers who don’t want to engage with technology, but that customer base is dwindling. By welcoming these advancements, we can move along with the customer, rather than pulling against it, and deliver a better loan experience.

2. Fight the commoditization: Loan officers now, more than ever, need to be able to articulate their value. They need to be able to talk about the pitfalls of consumers trying to navigate the loan process completely on their own and why their expertise and knowledge of the underwriting guidelines is going to be a benefit to that consumer.

3. Get out and interact with people, and use technology to do it: Using your smartphone to do a lot of your job is a liberating experience. Technology is not something that holds you back, it’s something that unleashes you. These days, you don’t need to be sitting at your computer waiting for emails or escrow updates to complete your task. Technology grants you the opportunity to be out in the field and meeting people face-to-face. The consumers’ desire to use technology should never be misconstrued as a substitute to the fact that they really do want to know who is doing their loan. The loan process once leashed loan officers to their desks. Now, they have an opportunity to get out into the field with clients and realtors and be a fully mobile road warrior.

A year ago, I would have said loan officers are slow-moving when it comes to the adoption of technology. Today, I know for a fact the majority of loan officers are adopting it. It is about the value of the tools and the tools are getting better—they are robust and can do things like push out real-time status updates and conditions, calculate monthly payments and upload documents with ease using a cellphone camera. All of this, however, will never replace the expert who serves as the consumer’s consultant, and that is the loan officer, in the flesh.

When a consumer finds a digital way of communication that they prefer the most, they may rely on that platform in various parts of their life. The mortgage industry should be able to accommodate this for today’s homebuyer, but there will always come a time when that homebuyer will need to pick up the phone or come into the office to have their loan questions answered. By understanding this and finding the right balance through the tips I outlined above, mortgage professionals can build the human connection in a digital world to deliver the best possible loan experience for the consumer.

Leif A. Boyd is executive vice president of national production at American Pacific Mortgage Corp. (NMLS #1850). Leif oversees all aspects of mortgage origination, including the oversight of the production department of more than 180 branches. He may be reached by e-mail at [email protected] or call (916) 960-1325.

This article originally appeared in the October 2016 print edition of National Mortgage Professional Magazine.

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