With the arrival of digital banking and mortgage solutions and improved technology, the processes required to close a loan are becoming increasingly efficient. Without these technological innovations, the likelihood of achieving shorter time frame on all types of loans is highly unlikely. And the numbers speak for themselves. Since the beginning of 2018, the number of days taken to close a loan has reduced over the last few months, as seen in the statistics below:

March, 2018

Feb, 2018 Jan, 2018
All loans

41

42

45

Purchase

39

41

44

Refinance

44

43

45

FHA (all loans)

41

43

47

Convention (all loans)

40

56

55

VA (all loans)

44

56

55

Source: Ellie Mae Millennial Tracker™

Further data also shows that only 20 percent of loans close in less than 30 days.
(Source: STRATMOR Group, Mortgage Bankers Association Article)

Technology is a deal-breaker

It is not surprising that a lot of lenders have taken to technology, as a means to improve their loan closing time. According to an article in Mortgage Bankers Association,Garth Graham, senior partner with STRATMOR Group, said that large banks, which mostly have custom-built technology solutions, invest more than $1,000 per loan in technology; while independent mortgage banks and smaller banks, by contrast, invest an average of $250-$300 per loan.” They also noted that 40% of the originators do a staggering 80% of the total volume of business in loans. So in turn, if one could increase the productivity of this top-tier by 25%, then that increase would equal the volume generated by the bottom 60%.

This just goes to show just how far technology can go to play a beneficial role in larger companies to manage their processes, and in effect, have a greater effect on the entire volume of mortgage loans.

The requisites for a successful use of technology

However, it is not just the deployment of technology or a platform that impresses borrowers, or increases customer satisfaction. Rather it’s a combination of people, processes and technology integration that combines to create a successful mortgage process. In addition, consumers don’t only look for items important to lenders e.g. reduced turn-times to close a loan, but consumers give importance to ‘softer’ aspects, like increased transparency. They want a commitment from lenders, and if that changes or comes with caveats, they want to know upfront. Often, lenders will overlook simple things that go against achieving customer satisfaction. For instance, foregoing the need to provide a proper checklist, leaving problems unresolved, leaving customer’s waiting on documents, or not providing proper contacts prior to closing, etc. Technology is therefore, just one of the vital components. But to truly be successful, a company must have all three – people, processes, and technology. In our opinion, all of these play an equally important role.

It all bottoms down to implementation

You will agree that most mortgage companies don’t turn to technology because of its complexity. For most lenders bringing in new technology (and related processes) can really be tough. In addition, it’s really not about the complexity of the technology, but rather, the really important aspect is how it is implemented. For implementation to happen correctly, technology needs to be easy to use, and for this the accompanying processes and the people managing the technology need to gear up correctly. Maybe implementing something as straightforward as a simple pilot program in the beginning, to get lenders familiar with the technology, could make it work out.

For further information on technological processes that can help your company achieve higher customer satisfaction and lower turn-times on your loans, please visit SLK Global’s site at https://www.slkglobalsolution.com/

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