January 12, 2022

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How mortgage lenders can increase efficiency while delivering excellent customer service

Fannie Mae and Freddie Mac have predicted that, by the time all the forms were signed and the housewarming gifts were delivered, the 2021 tally for mortgage loan originations will top $4 million.

Photo of Stephen Comer

Steve Comer

Assistant Vice President of Financial Services and Insurance Sales

A small model of a house sits near house keys.

Even as mortgage rates rise, and “despite the supply and affordability challenges” of a white-hot housing market, Joel Kan, the Mortgage Bankers Association’s vice president of economic and industry forecasting, expects purchase originations to be “even stronger” in 2022 than 2021.

Kan estimates that total purchase activity will reach $1.74 trillion in 2022 — a figure that would surpass the record-breaking numbers from 2021.

All that activity — occurring during a global pandemic that included nationwide shutdowns and an overnight change in how, and where, many people work — has made digital optimization a must for mortgage lending and loan servicing organizations.

In the Hyland webinar Consumer Loans in an Era of Disruption, Leslie Parrish, a strategic advisor for the retail banking and payments practice of Aite-Novarica, shared key findings from the firm’s consumer lending study. The study, along with other industry research, hammers home how critical automation and digital delivery are to lenders’ long-term survival.

One-stop shopping

Exemplary customer service is a goal for every organization.

For lenders, it can be every bit as crucial as the interest rate.

The Aite-Novarica study, Reframing the Homeownership Journey: Consumer-Focused, Lender-Led, found that 67% of the respondents who were interested in a one-stop homebuying experience would want to know more about receiving discounts on closing costs, plus rebates of a real estate agent’s commission that could be applied to such costs. Most of those respondents also were interested in a one-stop service that would allow them to manage all the activities associated with purchasing a home — from selecting an agent to searching for a home and saving comments on the properties they liked.

Lenders that offer these services, Aite-Novarica said, might be “able to mitigate” some of the price sensitivity “by saving consumers money across the entire process” and providing “a less stressful experience.”

Key number: 89% of the respondents to the Aite-Novarica survey said they were interested in one-stop shopping for the many services involved in buying a home.

A customer-centric approach

Purchasing a home is stressful.

Costs, uncertainty, an ultra-competitive marketplace and the potential for a drawn-out buying process are just a few of the factors that can add up to headaches for the consumer. Putting the customer at the center of the experience, with products and services that can save time and money, is a way for lenders to add meaningful value to the process.

Doing so also can help lenders differentiate themselves “in the market by partnering with vendors that can help deliver value to the consumer,” the Aite-Novarica report said.

Key number: In the Hyland webinar, Parrish said 53% of the respondents to her consumer lending survey said upgrading the ability to communicate with customers through a variety of channels strongly reflects their view. 

More than a loan

When you watch a movie, do you enjoy it less if you don’t know what the heck is happening? The same can apply to buying a home — only it’s just a bit more costly than loading up on popcorn and candy at the local theater.

Aite-Novarica has found that there is “a widespread lack of knowledge across various aspects of the home ownership process.” Lenders, then, have a chance to “create additional stickiness” by educating consumers about the many aspects of the process.

Providing information on what to expect during the mortgage origination process, the status of the loan and the different steps between the start of the application and getting the keys can be almost as important as “location, location, location.”

Key number: 73% of the Aite-Novarica respondents who were interested in the educational aspects of buying a home said they were intrigued by the possibility of a loan status page that would provide information and updates on where they are in the mortgage application and approval process. 

Next steps

Once the keys are in hand, the mortgage servicing company takes a more prominent role. The mortgage servicer prepares and sends statements, maintains payment records and loan balances, and pursues delinquent accounts.

The mortgage servicer is often a third party, as portfolios are commonly sold on a secondary market. But a trend is emerging in which more lenders prefer to keep servicing in-house, which coincides with the consumers’ desire for a one-stop shop.

From the initial outreach to the final payment, lenders and loan servicers want innovative technology that enables them to be more agile and efficient, and provide the best results for consumers. Protecting customer data and adhering to regulations are critical.

Often, the solution is content services technology that adds value to an organization’s loan origination and loan servicing systems.

Hyland, as a recognized content services leader that works with more than 3,500 financial services organizations around the world, has a team of experts that will take the time to understand your organization’s goals. We deliver powerful insights by integrating with the leading financial services systems — including Encompass LOS and the Black Knight loan servicing platform. 

Whether it’s intelligent capture, customer communication management, loan document tracking or records and retention management, we can be the home for your content services solutions.

Read the case study: First National Bank of America deploys innovative loan document tracking solution to track loans from origination through servicing.