How one mortgage lender put the 'pedal to the metal' on digitization
The necessity of working remotely amid the coronavirus pandemic has been especially difficult for mortgage businesses that still had human contact built into their transaction processes.
Lenders who have not adopted automated approval processes or online application workflow already trailed the competition. Now, companies need to accelerate any digital initiatives and integrations to keep the lights on, Muthu Srinivasan, chief technology officer at Planet Home Lending, said in an interview.
"The mortgage industry has been going in the digital direction for quite some time but was going a standard speed of 30, 40 miles per hour," he said. "The biggest change given everything going on right now is we are pedal to the metal. We are fast-tracking quite a few things, going at 65 to 75 miles per hour."
As the coronavirus crisis deepened in late February, Planet Home Lending reprioritized its efforts, pushing other initiatives to the second half of the year in order to focus on getting Docutech's hybrid eClose in place so it could close loans digitally. The company piloted the hybrid eClose option by the first week of April. PHL also expects to add remote online notarization by the end of April.
The historically low interest rate brought a flood of refinance applications, pressing demand during an already trying time, said Suzy Lindblom, chief operating officer at the firm.
"I think refinances will continue to go up. We saw a slight slowdown in the last week. I think that's temporary as people adjust to being home," she said. "People want to take advantage of these low rates and this is the first time some are able to afford to get housing."
The company's current servicing portfolio totals $21 billion, up from $18 billion at the end of 2019. Lindblom believes that home buying season may help to offset the prolonged financial instability brought on by the pandemic.
"People are adapting to a more virtual reality than ever before," she said. "And as they get more comfortable with this and realtors get more comfortable showing properties virtually, I think you're going to see an uptick again."
Adapting and adopting to the digital process will be key. PHL is comprised of about 850 employees and that number is rising. Implementing a new product — especially with everyone remote — takes dedicated teamwork between lender and vendor.
"There is certainly a learning curve — not just from the technology perspective but also from having to get more comfortable with the entire digital aspect of the closing process," Srinivasan said. "The eClose process is fairly new and involves several different pieces working well together."