Residential Magazine

The Brains of the Operation

Smart CRM technology bolsters the rest of the mortgage process

By Dan Harrington

There was a time when the word “automation” told a mortgage lender everything they needed to know about a new technology. In the early days, industry professionals needed to take some of the human touch out of the origination process to speed it up and reduce errors. While work continues to automate more of the process, the concept isn’t as exciting as it once was.

Over the past 20 years, lenders have invested in many tools that promised to automate the mortgage process but didn’t deliver. Today, the best automation is controlled by smart systems, either at the point of sale or embedded in the loan origination system. The best systems direct the automation using a combination of data, machine learning and so-called “authentic intelligence,” which involves human intervention.
It takes a central brain inside the system to make mortgage origination automation possible for the lender. There are opportunities throughout the entire mortgage process to incorporate smart technology, but where the central brain of the operation should be situated is a subject of some debate.
In a refinance-heavy market, where loans are falling from the sky, having a smart loan origination system is enough to push through high volumes. But in a purchase-oriented market, the brain of the operation should focus on the beginning of the process: lead generation, managing relationships and winning the borrower. When lenders choose to implement smart technology at the beginning of the loan process, it offers more leads and better client relationships to the originator.

Rise of smart systems

Applying authentic intelligence and machine learning to mortgage technology was a natural evolution of increased automation. If the system can’t make decisions on where to route work between automated processes, it will still require a lot of human intervention, which opens the process to human error. These are the very things automation was supposed to eliminate.
It was a natural step to create systems that can store complex workflow information, routing the work where it needs to go. When this first hit the market in the mortgage industry, some referred to it as “loan manufacturing” because it was capable of moving loans like physical products down an assembly line to the closing table.

If you really want to do a great job with every borrower — which is vitally important in a purchase-money market like the one we’re in now — you need to move your smart system all the way to the front.

Over the years, the loan origination system (LOS) has become a sort of central processing unit. Through advanced programming interface integrations, which connect applications together, the LOS is capable of taking many loans through the process completely on its own.
For a long time, it was assumed that since the LOS was the database of record, it was the logical place to put the most emphasis and control. Streamlined loan manufacturing using these smart systems worked quite well during the recent refinance boom. These relatively simpler mortgage transactions flew down the assembly line because lenders had plenty of time to dial in their process.
But times are different now. In a purchase-money market, lenders are dealing with a more complex product with many variations. They are often not in control of every aspect of the process. Unlike refinance loans, which fell into lenders’ laps on a regular basis, originating purchase-money loans requires lender outreach.
This is good news for the developers of point-of-sale (POS) software, who have spent the past few years perfecting their tools. POS software quickly evolved into smart front-end systems that could do much of the work involved in originating a loan before it was ever sent to the LOS.
As lenders adopted AI-powered point-of-sale systems, the smart part moved closer to the front of the origination process. This makes a lot of sense: The better job the lender does at the very beginning of the process, the less likely the applicant is to go with another lender. We know that many borrowers are applying with a number of different lenders and then choosing the one that serves them best. But is this the best part of the mortgage process in which to use smart technology? Maybe not.

Relationship engagement

Having the smartest technologies closest to the point of sale makes good sense. But this isn’t close enough to the beginning. If you really want to do a great job with every borrower — which is vitally important in a purchase-money market like the one we’re in now — you need to move your smart system all the way to the front.
That’s why the brain of the mortgage lending operation needs to live in the customer relationship management (CRM) system. Of course, that was difficult in the past because there were no smart CRMs. In the beginning, these tools were little more than a database of prospects that could track conversations between an originator and a potential mortgage applicant. Even today, many big-box CRMs are still cumbersome and complex, making them more frustrating than helpful for the user.
What originators truly need is a relationship engagement platform — a smart CRM that is built in a similar way to other mortgage processing software and can have the same connections to third-party technologies. But unlike a loan origination system, it can engage with consumers before they have filed an application for a new loan. And unlike a point-of-sale system, it can hold the consumer and nurture them until they are ready to begin the process of taking out a new loan.
There are many other tools that can now be wired directly into a smart CRM. For instance, there are tools that scan a lender’s past-client database for new leads. These are powerful prospecting tools, but if all they do is drop the lead into a queue and hope an originator will make the call (like other CRMs do), they will fail. These tools are most effective when they prospect and drop leads directly into the lender’s smart CRM, where they can be routed automatically to an originator, marketing list or other form of outreach.
A smart CRM is a powerful tool for sales managers, allowing them to send and track leads, observe engagement and measure results. They provide automated work queues, serving up leads that are complete with borrower information and call scripts. Furthermore, they can automate the task of nurturing a consumer until they are ready to begin the origination process, never losing track of them and never letting the prospect forget about the lender.
Best of all, a smart CRM can feed prospect information directly to the POS system, directing the automation already built into these tools to begin the process whenever the consumer is ready. By the time it gets to the LOS, underwriters and processors have everything they need to efficiently handle the loan.

A new market

If a lender had a never-ending source of loan applications, like they saw during the refi boom of 2020 and 2021, having a good LOS or an automated POS might be enough. That won’t work in a purchase-money market. And frankly, it doesn’t fulfill all the promises automation has made to the industry.
When half of your prospects aren’t ready for a new loan, whether for credit reasons or because they haven’t found the right home yet, these leads can live in the CRM until they are ready to move forward. The CRM should be smart enough to keep the leads warm until they are ready to transact. Smart technology with built-in marketing automation can do that.
And don’t forget about the real estate agent. In a purchase-money market, they are as much your client as the borrower is. Smart CRMs provide these important business referral partners with marketing tools and information, leads for new potential homebuyers and status information for all loans in process. Each of these things make real estate agents more successful at what they do.
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In a mortgage market where interest rates are rising and sales volumes are falling, lenders are going to have to get smart to compete. With a modernized smart CRM as the brain of the process, every other system is made more effective as the CRM provides the right information to the right party at the right time.
Anything less and the lender might not be the first source the homebuyer thinks about when they are ready to finance their new home. Fortunately, smart CRM technology built specifically for the mortgage industry exists today as a tool to help any lender be successful in this purchase-money market. ●


  • Dan Harrington

    Dan Harrington is CEO and co-founder of Usherpa, a customer relationship management-relationship engagement platform that empowers mortgage lending and real estate professionals with intuitive automated marketing, engagement tools and customized content. He has more than 25 years of experience in integrated fintech relationship management, developing state-of-the-art CRM platforms combined with automated content marketing services.

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