Don't forget what matters in mortgage...

Over the past few years we have seen a number of companies raise big money to start "revolutionary" high tech mortgage companies that are going to completely transform the process. Except they didn't. And it is often pretty clear to long time mortgage folks that the people who loaned that big money and the people that borrowed it didn't really "get" mortgage. It is different from other consumer financial transactions. It is more complex, requires more participation from the borrower, and it is much longer. It is more similar to dealing with an ongoing medical issue than it is to getting a car loan. In Malcolm Gladwell's book "Blink" he talks about the doctors who get sued versus those that don't and mentions a study that showed that the doctors who don't get sued spend more time with the patients, explain things in more detail, and always check for understanding. Unfortunately our industry has often found cheaper ways to do parts of the process that don't add to the borrower experience but rather take away understanding, or add to an increase in the likelihood of error. Technology might make parts of it easier and faster for the borrower but if those improvements take away the parts that are most valuable to the borrower than they are a net negative. What is the piece that they missed? Refinance is relatively easy in the mind of many borrowers - but purchase is not. It is a completely different ball game.?

Point of Sale loan applications like Blend make an online experience easier for a borrower vs the online applications they had to complete 10 years ago.?There is no question it is easier to electronically pull income and asset information in to an electric loan file than it was 20 years ago for the borrower to have to literally go up in the attic to look for stored documents. eSign documents and remote closings keep paperwork to a minimum and provide convenience to a borrower - no question. But where does this fit in to the equation: I think that buy far the most common comment I have received from borrowers over the years while completing a 1003 and explaining each part of the process in detail is something along the lines of "thank you for taking the time to explain everything - no one has ever done that before when I was getting a mortgage..."

I feel strongly that the companies that do not make educating and preparing the borrower a primary focus of their process are at risk of making themselves irrelevant. If I were starting a lender today I would try to buy FinLocker - it is a product that starts prepping a borrower for a mortgage the day they sign up for the app and shows them exactly where they stand along the way. When they are ready, they hit a button and they are almost done with the process. The technology was used in the right place in the process and educated them along the way. I would also buy the best online training company I could find - someone like CornerstoneOnDemand. It doesn't matter if they currently train on mortgage - in fact I would prefer someone that doesn't. I would work with them to build borrower facing content, integrate it in to FinLocker, and make it the primary focus of my mortgage website. I see loan officers complaining about rates all of the time and always have. But very rarely do customers mention rate if you do a great job of teaching them. I think screen share is a great opportunity that is not being taken advantage of. Want to make sure you have a quality 1003? Share your screen with the borrower when you are filling it in. Same with guidelines, ratios, income calcs, closing costs, etc etc. Let the borrower see exactly what you are looking at while you are doing it. Wow them with knowledge. The final thing I would do is to come up with a innovative way to stand out with servicing (I have one, I'm just not going to tell you!) because a large percentage of customers I have talked to over the years bring up servicing issues very early in the 1003 call. You have to sell what people are buying.....

There is lots of good stuff happening in mortgage - I am just hoping that the right pieces fall in line and our quest to make it faster and cheaper doesn't leave out the most important thing. The borrower.?

Tim Birkmeier Mat Ishbia Greg Schwartz Brian Simon, CMB Brian Permutt Brian Vieaux Anthony Hsieh Mike Cagney Kristy Williams Fercho Rich Barton Chris Britt Zachary Perret Aviram Shahar