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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2017

The Search for an End-to-End Technology Solution

It’s time to stop patching together the mortgage loan process with Band-Aids

Illustration by Dennis WunschTechnology in the mortgage business is constantly evolving. Still, the industry remains largely behind the technology curve. It is not for a lack of investment: Mortgage companies spend millions of dollars on technology solutions in an effort to streamline processes, reduce risk, protect customer data and distinguish themselves from competitors.

Clearly, technology influences almost every part of the mortgage business. Whether it is producing loans, communicating with customers, or marketing products and services, technology is essential in performing tasks that allow a company to operate successfully.

So why is the mortgage business, as a whole, typically behind other industries on the tech front? And what does all this mean for the mortgage originators who are working on the front lines every day?

Technology hurdles

For one thing, technology in the mortgage space isn’t always easy. It’s difficult to purchase, implement, manage and upgrade systems. Plus, each time a new piece of technology is added to the puzzle, the complexities increase.

The painful integration process alone can keep businesses from making the necessary advancements in technology, without adding in the financial investment required to run and manage the new platforms. Time and time again, new technology is deployed to help a company solve an issue, only for the organizations to discover that not all employees are using the technology to its fullest potential. Even worse is when the product does not do what it is supposed to do.

Another roadblock to the adoption of new technology is duplication. This occurs when a business implements multiple solutions that do the same thing, usually resulting from a lack of interdepartmental communication.

When group leaders don’t maintain an alignment of vision for the future, decisions begin to be made in a bubble, rather than keeping the advancement of the enterprise as a whole in mind. This breakdown in communication can result in the adoption of multiple technology solutions for similar problems, resulting in the expensive practice of duplication.

The most common problem, however, is that mortgage companies continue to look for Band-Aid fixes to solve single pain points, as opposed to finding an end-to-end technology solution. As mortgage companies grow in size and the need to support increasing loan production rises, technology officers typically seek out point solutions to “plug the holes.” These point solutions may work well for the short-term — and can help the business move onto the next-highest-priority issue, but they are not usually the best long-term answer.

Today’s borrowers expect their mortgage experience to be smoother and faster than before.

The problem is that as businesses become inundated with off-the-shelf or custom-developed point solutions, this growing number of systems often turns out to be increasingly difficult to manage and integrate with already-existing platforms. Although individual solutions can be implemented to address unique challenges, getting these systems to talk to each other can be difficult, if not impossible. What was promised in the salespitch doesn’t always mesh with the reality of the end-user experience, and the business ends up seeking even more tools to fulfill their needs.

End-to-end solutions

With so many factors impacting the effective implementation of technology within the mortgage industry, the preferred solution would seem to be a single program that can “do it all.” Although a few vendors do offer single digital platforms that claim to effectively manage the loan process from application to closing, these still have drawbacks that prevent the widespread use of the tools.

For starters, producing a single, end-to-end technology solution is an expensive undertaking — a cost that must inevitably be passed on to the companies purchasing the program. This steep price is one of the primary reasons businesses turn away from this option. Even if a new program is purchased, a business would need to employ the right staff to continually manage the platform, adding to the cost of an already expensive endeavor.

Additionally, these digital tools are complicated to configure, which is why there are so few in existence currently. Creating a program that accommodates the many intricacies of the loan process from start to finish is a tall order that few have been able to successfully take on. And implementing a new program of this magnitude would certainly have a negative impact on production levels in the short-term, which is a sacrifice that many mortgage companies are not willing to make.

Beyond these initial considerations, each mortgage company is unique and managed differently. Building a tool that is customizable and flexible further increases the cost and complexity of adopting an end-to-end solution.

Ultimately, however, this flexibility is key for expansion, and limiting that component in the mortgage industry could be catastrophic for growth, which is another reason many companies may have an aversion to this type of digital platform.

The payoff

Although businesses may be reluctant to invest in something as monolithic as an end-to-end loan-processing solution, the long-term payoff may be worth the risk, especially for originators. The percentage of borrowers looking for a more tech-centric mortgage experience is on the rise, so it is more important than ever for originators to work for a company that stays ahead of that demand.

Today’s borrowers expect their mortgage experience to be smoother and faster than ever before. They want real-time communication, fewer tasks and quick results. The experience can be quite the opposite, however, if effective technology solutions aren’t in place. Even if digital platforms are utilized, processes can still get bogged down, depending on the number of different systems a business needs to employ to simply get the job done from start to finish.

Mortgage companies that have already adopted end-to-end solutions are experiencing the upside of achieving a sleek borrower experience that simplifies operations and ultimately saves money. This level of technology differentiates them in the marketplace, which leads to higher employee retention, repeat business and increased revenue for everyone. To remain competitive, forward-thinking companies need to invest in technologies that will streamline and automate their processes so turn-times and service levels can continue to improve. Ultimately, the mortgage company that can offer a seamless borrowing experience that uses technology to regularly communicate with borrowers, increase operational efficiencies, improve loan quality, reduce fraud, decrease turn-times and diminish costs will certainly reap the benefits in the end. 


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