Opinion

The borrower's experience begins at the point of sale

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I'm sure almost everyone in the mortgage industry truly cares about making the origination process easier, simpler and less frustrating for borrowers. But until some fundamental changes happen with how lenders use technology, it isn't going to happen.

Consumers today are able to obtain virtually every conceivable product or service with increasingly greater speed and convenience. How we commute, how we shop, how we handle money and how we entertain ourselves have been revolutionized by technology. Almost every industry has experienced revolutionary changes in how it does business as well. And yet, from the consumer perspective, the mortgage process has changed relatively little.

Yes, it is easier to find mortgage information online, and no longer having to scan and fax documents is a plus. There have been many other valuable innovations, too, including automated income and asset verifications and digital signatures. Meanwhile, a growing number of fintech products has emerged that has streamlined the beginning stages of the mortgage process.

However, it still takes about the same amount of time to close the average mortgage loan as it did 10 or even 20 years ago, and it costs significantly more to do so. Indeed, while technologies used in other industries have evolved along with new consumer behaviors and expectations, the loan origination system hasn't, which means it is poorly suited for providing the type of mortgage experience consumers increasingly demand from their lenders.

One of the biggest shortcomings of most LOS software is that it is not capable of playing much of a role in the mortgage transaction until after the borrower submits a loan application. Rather than having the LOS involved at the point of application, however, it really should begin at the point of sale — the precise moment when the borrower decides to engage a lender to buy a home or refinance a loan.

Legacy LOS providers realized this some time ago, and for the past several years, they've done their best to integrate POS solutions from other providers into their systems. Unfortunately, these integrations haven't worked out quite as well as their customers have hoped — or expected — mostly because the core LOS technologies involved were often designed before the need for POS solutions emerged.

For POS and LOS technologies to be truly efficient, they should be built into the same platform from the start. And that's exactly what’s starting to happen with the new generation of origination platforms entering today's market. These newer platforms, such as Origence, have borrower-facing tools built into them from the ground up, so any integration issues are simply nonexistent.

Newer platforms also enable borrowers to quickly apply for mortgages regardless of the type of device they use, including mobile platforms. They can be integrated with multiple fintech providers with borrower-facing tools, allowing lenders to customize their digital approach to consumers. And they can leverage automation to help borrowers quickly find the loan products, quotes and pricing that best fulfill their needs without the assistance of a loan officer — and without having to give up their personal data. There are few better ways to quickly build trust with borrowers than that.

There are other benefits to a blended POS-LOS platform. By being able to upload documents and have their income and assets verified almost instantaneously, borrowers can now complete the entire loan application process in nearly the time it takes to brew a cup of tea. Some new platforms are even being designed with artificial intelligence and machine learning tools that would be practically impossible to use with legacy LOS products. And they're able to automate much of the compliance work at a fraction of the cost of what lenders spend on human loan auditors.

Most importantly, perhaps, is that by combining POS and LOS capabilities in the same system, lenders can use the same data for both sales and loan manufacturing. This not only reduces friction in the loan process, but it has also been shown to improve pull-through rates as much as five times or more.

Borrowers are constantly searching for greater speed and convenience when getting a mortgage. Sooner or later, the lenders that can't keep up with these demands will ultimately lose out to the lenders that can. With the rapid advancement of new origination technology, the gap between the two sides is growing. Which begs the question: Which side do you want to be on?

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