Despite Technology Availability, Mortgage Customer Service Still Falls Short

Sorohan, Mike msorohan@mba.org

October 28, 2016

BOSTON--Greg Yeager, director of strategic initiatives with Simplifile, Provo, Utah, says lenders and servicers need only look at anecdotal evidence to see that consumers still consider the mortgage experience too burdensome.

"Why do sellers prefer cash buyers?" Yeager posed here at the MBA Annual Convention & Expo. "I've seen situations in which sellers accept a cash seller for less than someone with a down payment. It has to come down to believing that all-cash is a less burdensome process than someone who has to finance."

"We still run into companies that are heavily paper-oriented and when we ask them why, and they say, ‘well that's how we've always done it,'" said Nancy Pratt, vice president of partner relations and government affairs with Pavaso, Plano, Texas. "Well, we also used to churn butter. You have to have sound systems in place so that you can keep the customer engaged and educated."

Changing customer demand requires more sophisticated, yet consumer-friendly systems to integrate customer experience through closing and into servicing. "We can use technology to improve the process regardless of the type of transaction," Yeager said.

"If we can make the mortgage process easier than death, then we can create a level of comfort for the customer in the biggest financial decision of their lives," Pratt said.

"Customers have increasing demands," said Laura Kelly, managing director of the Valuation Solutions Group with CoreLogic, Irvine, Calif. "Customers want things instantly; they expect the process to be transparent; they want the process to be relevant; and they want it to be mobilized. If you can't meet those criteria, then it becomes a ‘Frankenprocess' for the consumer."

Kelly said the real estate finance industry can take cues from companies such as Starbucks and Netflix to create a better mortgage experience for the customer.

Pratt said the newer generations of home buyers, such as Millennials, expect a simpler process. But she said development of the eMortgage has given other generations, such as Baby Boomers, a new perspective on customer service. "In 2006 we did our first eMortgage with a 74-year-old lady," she said. "She only had to sign her name one time, which greatly pleased her."

Yeager said the information-sharing aspect of the mortgage transaction must be improved. "The opportunity to get misinformation from different parties remains high," he said. "We see technology as a means to collect information better and more efficiently. The more we can empower all the parties with the most current, timely, relevant information, the more likely we are to have the right answers for the consumers."

Yeager said data is key to improving transparency for customers. "Sometimes we can be so siloed that we don't understand each other," he said.

Kelly, who described herself as a "data geek," said companies that don't effectively use data are getting left behind. "When you move into the valuation process and the home-buying experience, there is a huge opportunity to use data," she said. "The other thing data is good at is managing fraud; if you look at something that is data-driven, it allows you to focus on the highest risk properties...you almost have to think of data as an end-to-end process."

So, when is the eMortgage going to become prevalent? "The process is probably not around the corner, at least in the appraisal process," Kelly said. "We're looking to try to combine data analytics with a physical inspection that can provide a greatly accelerated appraisal process....but there still has to be some physical judgment involved in the appraisal process."

Pratt said people in the industry have been predicting the eMortgage process for years. "It's a little different now," she said. "People know about the process, and lenders have had to adapt. As a lender you should want to do the mortgage process as electronically as possible. Even FHA has made eMortgages part of the process. You need to be embracing this; you need to be embracing this now...the technology is there; it cleans up the process; consumers like it better; and you reap the benefits."

Yeager said by looking at all the documents required at closing, so much of the package doesn't have to be "wet-signed."

"The GSEs are really creating momentum on this, which should spur more adoption and use of partial eMortgages," Yeager said. "As we push through each of these docs, you see how each document can be eSigned...all of those things lead to a better process because the consumer feels more control. The more it becomes available, the more lenders can gain a strategic advantage."

"There are so many opportunities to improve the customers' experience," Kelly said.

Yeager agreed. "We have to be doing more as an industry to tout the benefits of these processes," he said. "We are so focused on the internal boxes and we figure that the consumer will just put up with that. We have to be better that. The challenge to the industry is to find where technology can be of best benefit. We have to make the effort; and we have to tout the effort. Our customers want more of a relationship environment and that's what we have to do."

"The early adopters of this technology weren't looking for a better ROI, but because they wanted to do something better for the customer," Pratt said. "We're in business for that customer, and if we don't keep that customer, we're not going to be in business very long. We have to listen to what they are asking for, and be nimble enough to change. In the end, it benefits the organization."

"We have to focus on the experience," Kelly said. "We have to think big. This is not going to be fixed by small thinking. We have to push ourselves to the limits. And anything we do has to be held to the light; and if we excuse ourselves for anything less than that, then we are doing ourselves and our customers a disservice."

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