As the mortgage industry continues to come online, digital verification is all the rage. Application information pulled directly from the consumer's financial data source promises higher-quality loans, and offers lenders an opportunity to automate time consuming manual aspects of their processing flow.
It's not just hype — digital verification is already generating results. Our customers have seen significant improvements in loan quality and reductions in origination and closing time frames. They're able to close more good loans, in less time than it used to take when nearly every step was manual. That in turn translates to a better overall experience for their customers, who get faster decisions and the kind of simple, all-digital process that modern consumers expect in their transactions.
A "better" experience, however, is not the same as a "good" experience. If you ask consumers what kind of transaction fills them with anxiety and dread, for many people getting a mortgage is still right up there with a trip to the Department of Motor Vehicles. The reason? Despite the automation improvements that digital verification has enabled, for most consumers the mortgage process remains opaque and unpredictable. It's not clear what's happening, or why, or when they might find out if the largest transaction of their lives will proceed smoothly.
Fortunately, digital verification can help here, too.
The real promise of digital verification, beyond just process improvements and time savings for lenders, is the ability to help both the consumer and lender drive to the right outcome more quickly, with greater transparency and predictability along the way. With complete, accurate, straight-from-the-source data at their fingertips, loan officers and underwriters have everything they need to determine the best choice for a loan application, right from the start.
If the correct choice is to approve the loan, the consumer is able to secure their new home that much faster — and in hot markets like the San Francisco Bay Area, bids win or lose on their ability to move fast. Even if the right choice is to deny the loan, the consumer gets an answer without wasting hours of their time tracking down and delivering paper documentation, then waiting weeks on pins and needles while mysterious gears grind in the lender's office.
The all-online process that digital verification makes possible also allows lenders to communicate more transparently with their customers than ever before. Digital platforms let consumers see exactly where their application is in the process, what stage of the workflow it's currently undergoing, and what needs to happen next. This clarity helps take the anxiety out of the process, making it a series of reasonable steps rather than an onerous unknown.
As mortgage originators, service providers, government-sponsored enterprises and regulators work together to deploy and adopt innovative new technologies, it's imperative that we don't lose sight of the consumer's needs and how we can better meet them. Otherwise, we may look back at this as the time when we had an opportunity to transform home buying into an experience consumers don't regard as a nerve-wracking chore — but settled for incremental change instead.
Rajesh Bhat is the chief executive officer of Roostify.