Mortgage brokers must leverage tech to strike first
Although they still lag behind the rest of the mortgage industry, brokers are embracing advancements in technology in ways that could help build their business.
The rise of broker-focused tech should bring growth to the wholesale market share, with some forecasts calling for it to double in the next year. Brokers now have the tools at their fingertips to allow borrowers to do more on a self-service basis. It's just a matter of using them correctly and creating efficiencies.
"To be cheaper, better, faster, you have to see everything that’s happening and process it in a different way," Kevin Peranio, chief lending officer at Paramount Residential Mortgage Group, said during a panel discussion at Digital Mortgage in Las Vegas. "The vast majority of consumers don’t shop around when finding a mortgage broker, so it's very important that you get to them first."
Securing a borrower is only the first step for a broker. Being able to walk customers through the process and answer their questions is paramount to a seamless transaction.
"What I see right now is a lot of lag time and delays because of confusion," Samir Dedhia, principal at SD Capital Funding Corp, said during the panel discussion. "You have first-time homebuyers coming on and not really understanding the concepts fully. They're not doing this transaction every day like we are. This isn't like buying something on Amazon. They need us to guide them through the process."
The front end of the sales funnel has the most development. Closing the technology gap would require work in the middle all the way to the end of the loan process.
"One of the biggest things I haven't seen anyone do well is continuing the communication process after the origination is over," Katie Sweeney, senior vice president of strategy at Arrive, told attendees at the meeting. "We focus a lot on how to make that initial transaction efficient and effective, but brokers haven’t always been great at what happens next and retaining those customers."
The answer seems to be where a lot of companies in the industry have been setting their sights: a single, end-to-end platform for all the players to congregate.
"The benefit of technology right now is it's customizable, the processes we have currently in place highlight the self-service," Dedhia said. "One piece that would really help the industry is a collaborative platform for all the parties involved, so they can communicate and figure out what's going on."