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Mortgage Lenders Adapt to Reality of Market

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According to the June Insights Report from mortgage advisory firm STRATMOR Group, as mortgage lenders adapt to the reality of a vastly changed market focused on purchase loans, adopting new mortgage technology has become a priority.

In “Light a Fire Under Your Digital Adoption Plans,” STRATMOR Senior Advisor Sue Woodard analyzes why there is resistance to technology change and what lenders can do to get their teams to embrace new tools.

“As lenders analyze their businesses to address the new reality, a big frustration point is the lack of adoption and engagement with the many technology purchases made over recent years,” says Woodard. “The frustration is understandable. Smart lenders have invested in smart tools designed to allow their teams to operate more efficiently, drive more volume with less work, create excellent customer experiences and bring in repeat and referral business — the list goes on and on.”

But as Woodard points out, tools can’t benefit the lender if they’re not used. Data from the STRATMOR Group Technology Insight Study on Digital Innovations reveals that adoption and engagement numbers are low. And the most often stated barrier to adoption was: “Difficulty of getting LOs to change process and behavior.”

Lenders must overcome this barrier if they hope to realize an ROI from their recent technology purchases, Woodard says. “The time to focus on this issue of adoption is not only now, it is right now, she says. “STRATMOR’s Technology Insight Study clearly indicates the benefits of adopting digital mortgage technologies, with speed-to-closing and increased borrower satisfaction topping the list. Notably, enhanced LO productivity ranks highly overall.”

Woodard also points out that human nature is at play, and change is hard for people. “As much as we all want to be seen as an agent of change, an early adopter and a forward thinker, in real life, most humans just don’t operate that way. Change is hard, and we naturally resist it in favor of the most powerful force on earth — inertia,” she says. Helping loan officers and other employees see that adopting a new technology will ultimately improve their business and make their lives easier will go a long way toward overcoming resistance.

Woodard discourages lenders from discounting or eliminating technology solutions that may not have had heavy recent usage. “Just because your people haven’t used them much over the past two years does not mean these solutions are useless,” says Woodard. “In fact, these solutions may be exactly what is needed to meet the current challenges.”

Woodard outlines a number of key recommendations to help lenders, whether they are in the middle of rolling out a new technology or are still struggling with the adoption of technology already in place.

Woodard also advises lenders to fully understand why they are making a technology investment. “Plenty of money is being invested in technology, ranging from five percent to even 12% of overall company costs,” according to Woodard. “Yet very often we find lenders are unclear on the ‘why’ behind their investment, as well as the expected ROI. As you make and implement technology decisions, or even contemplate decisions made in the past, your why must be crystal clear.”

Woodard also stresses the importance of smooth technology integrations. “During the wild ride of the past few years, many lenders acknowledge that they purchased or inherited technology solutions without enough of an eye towards how all the shiny pieces of technology would all work together. Ultimately, this resulted in some data silos or broken process flows.” Yet solution providers have made remarkable progress on technology integrations over the past few years, she says, so it may simply require a renewed focus internally to get all of the pieces in place.

“No technology out there is a magic bullet that will instantly make your company triple profits, eliminate all waste and ensure employees and customers are uniformly happy, healthy, wise and good-looking,” says Woodard. “Every successful company implementing technology is doing so with eyes wide open and with realistic goals. This applies equally to hard fiscal numbers, customer experience metrics and employee feedback tracking.”

A second Insights Report article by STRATMOR Group Customer Experience Director Mike Seminari, “How Can Originators Empathize with Their Borrowers?” examines the role of empathy in a tough mortgage lending environment. With refinance applications down 75 percent and interest rates two points higher than the same time last year, lenders will have to compete not just on product and price, but also on the emotional elements of their offering.

“Emotional connections with both their new and existing customers may well be the defining characteristic that separates the winners from the losers over the coming months, and perhaps years,” Seminari says. Click here for the June 2022 edition of STRATMOR’s Insights Report.

Find the entire article in the June Insights Report.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport, with more than six years of writing experience. She has served as Editor-in-Chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington. She has covered events such as the Byron Nelson, Pac-12 Conferences, the Women in Dallas Film Festival, to freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, she is an avid jazz lover and reader. She can be reached at [email protected]
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