Home buying is one of the most important decisions in a person’s life. It’s more than a financial commitment. It’s the journey from a dream to reality – requiring care and hand-holding. Lenders understand this and so must craft their service to achieve borrower delight that reflects this understanding.
A wave of technology implementations in the mortgage origination space is slowly making all points of contact digital. But even as more lenders adopt technology, recent research shows an astounding trend in borrower demands. To everyone’s surprise, borrowers are now asking for more human communication. This makes me think – is technology an overkill in mortgage lending? Will technology be able to replace human interactions and deal with emotions?
While there are varying responses to this question, the fact of the matter is that we need both technology and the human touch to make the mortgage experience really work well.
Lenders must provide customers with a combination of in-person communication (face to face/ voice) and online channels of interaction to offer the best possible customer experience.
So what is the perfect balance between technology and personal interaction, especially in the approval process of a mortgage?
If you ask me there are 3 scenarios where the borrower needs maximum attention:
1. During Loan Application
The first is during the loan application phase. This is the first time the borrower interacts with the lender and this is where the lender can lay the foundation of a long-term relationship. Personal interactions make it easy to understand human emotions and a sense of security. Moreover, first-time borrowers generally have doubts that can be easily clarified quickly over a call or an in-person meeting. A chatbot or an online application cannot provide the same level of empathy or make the borrower feel completely safe.
A 2019 Borrower Insights Survey by Ellie Mae reflects this – 47% of borrowers said they would prefer to work directly with a person during the loan application and 60% of potential borrowers said that they abandoned their online mortgage application because they felt it was taking too long.
2. During document Collection
The second scenario is document collection. There are many mobile and online apps that make document collection quick. The question is: how user-friendly are they and how comfortable are the borrowers with them? With some recent data breach occurrences, borrowers are even more afraid about uploading their personal information using an app that may be hosted on cloud or an unknown private server. Ellie Mae’s Borrower Insights Survey 2018 shows that 46.5% of homeowners said they were concerned about entering their personal information online.
My recommendation would be a mix here: Interact with the borrower (in person or over a call) and introduce the document collection process to them. If it’s completely online, you need to reassure them about the safety of the process. The key is to talk to them and walk them through the process rather than, say, forwarding a link by email. Borrowers – millennials, Gen X or Baby boomers – have to be hand-held initially. Lenders must spend time to make them feel comfortable as it’s a start to the lender-borrower relationship.
3. During Processing
By this phase of the origination process, the lender should have established a sense of trust with the borrower. Now it’s all about strengthening the relationship. Lenders often do a great job of winning the customer over during the loan application phase but drop the ball later. This directly impacts pull-thru in many cases. It is important that lenders understand the criticality of communication and make sure to connect with the borrower periodically during the origination process.
While email notifications and dashboards are great for real-time loan updates and statuses, they may not be able to replace the warmth of a lender representative calling to let someone know that the loan is in process and everything is going well – an expectation from the lender, as we saw, that borrowers have. Lenders must include periodic in-person communication in their operating procedures to keep the borrowers engaged.
The secret sauce
Lenders are enthusiastically applying digital innovations to their mortgage lending processes. This is necessary, but they must give equal preference to adding customer contact capabilities. And these can be easily done with omnichannel contact center services for mortgage origination. This is something that is used in mortgage servicing already. With borrower expectations changing rapidly, lenders can easily outsource their customer contact and voice-based requirements, while they reinitiate focus on their primary responsibility of approving borrowers and closing more loans to grow their business while remaining profitable.