Keeping the mortgage machine in motion amid a global pandemic has pushed tech vendors from the periphery to the vanguard. Inherently, they were better prepared for this
than many a mortgage firm — and they’re seeing record volumes of subscribers as a result.
Some are recording an exponential increase in business — AI Foundry and Blend each reported year-over-year growth of about 400% in March, others reported 300% quarter-over-quarter increases and even 100% monthly jumps from February. Ellie Mae's platforms
totaled 207,723 closed loans in March 2019 only to see that figure balloon to 363,585 in March 2020, a 175% annual rise.
Coronavirus and the subsequent social distancing measures
aren’t the only reason for the spike. The Federal Reserve's interest rate cuts always bring increased activity. The most recent of those reductions resulted in the lowest rate in over 50 years and came with a spike in refinancing, sending originators scrambling for digital solutions.
"While there's the demand and need to embrace some of the solutions that allow for better virtual engagement, right now it's unprecedented for lenders on the refi side," said Joe Tyrrell, chief operating officer at Ellie Mae. "They're just trying to keep their head above water and don't necessarily have the capacity to start to adopt new solutions at this time."
AI Foundry, for one, processed several thousand loans a day for its customers since mid-March and Stephen Butler, founder and president, expects that volume to get bigger.
"All of our customers are having record days and record weeks for new applications and for closings. We're getting quite a bit of pleas to come in and help right away," he said. "They've got quite a pipeline, double and sometimes triple where they were a year ago in terms of a loan volume."
However, the exponential growth comes as a double-edge sword for lenders trying to keep their heads above water. Current processes and workforces can't keep up and they need to make sure nothing falls through the cracks.
For lenders to meet demand in the meantime, they need to focus on three things, according to Barry May, Blend's head of customer success: removing all the unqualified or low intent borrowers from the pipeline prior to submittal; triage those leads that are most likely to close based on borrower intent; and reduce all the processing work by eliminating any unnecessary tasks.