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Borrower Demand Driving the Digital Mortgage Revolution

Souren Sarkar, CMB, Founder/CEO, Nexval

Souren Sarkar, CMB, is Founder and CEO of Nexval, a technology company specializing in mortgage automation processes and IT infrastructure upgrades, located in Miami, Florida. Sarkar has more than 25 years of experience as a technology leader in the mortgage and banking arena, and is an expert at improving the performance and scalability of service-driven businesses using workflow automation.

MReport recently had the opportunity to speak with Sakar regarding the latest in the mortgage tech space. Innovators like Souren are on the frontlines of the industry’s digital advances, and as discussed, must keep up with the ever-growing demand by the consumers and the industry alike.

What processes and digital tools have you seen the industry embrace and gravitate toward in a post-pandemic environment?
Sakar: Distributed workforces became the primary driver behind the immediate technology innovations that were needed once COVID struck. Prior to the pandemic, the mortgage business was very centralized and dependent on workers being in one location. Some companies had workers working remotely, but mostly in administrative functions. But with the pandemic came moving core operations to remote workers, including call centers and customer service. Overnight, lenders were challenged with taking legacy systems and trying to transfer them to a distributed environment, which wasn’t easy since these systems operated on centralized, controlled databases.

In addition, because mortgage transactions involve sensitive customer data, companies also had to find a way to ensure privacy once everyone was working from home and not being centrally monitored. Another issue was no longer system uptime in one location—it was uptime with several hundred or thousand employees in just as many different locations.

These were the immediate challenges. Some companies stepped up using legacy systems and Citrix-based technology to replicate the desktop to their workers’ remote locations. Other originators and servicers had built-in solutions, or they either had to build them or acquire them.

After the pandemic, many software providers were approached by their customers who needed technology for a distributed workforce, so software had to be built from the ground up to incorporate these features. This led to distributed workflow technology and the ability to leverage process automation. With distributed workflow and a distributed workforce, the key is breaking up the workflow into small portions and send it out to people. Companies began focusing on process automation and looking at which functions can and should be done in an automated fashion. As a result, robotic process automation and workflow automation came into play, which remain strong drivers in the industry today.

What has yet to be uncovered in terms of mortgage technology by the industry to ease the mortgage process? Have we reached a ceiling?
Sakar: We’re just in the beginning stages of what can be accomplished through technology. Any disruption requires progress, and the pandemic shook up the industry in both positive and negative ways. Negatively, it presented huge challenges with disaster recovery and business continuity. But on positive side, every company was forced to make technology a central focus point—it was no longer an afterthought. This has made IT groups and development groups central actors in mortgage companies. Both now have an impact on the bottom line of the company.

Another positive impact has been that the mortgage industry has finally woken up to the fact that increasing automation is required to maintain profitability and overcoming disruption. While a lot of mortgage functions can be performed without humans, lenders were still dependent on technology providers with controlled, antiquated systems that demanded manual processes, which created gridlock. Now everyone is looking very aggressively at upgrading their technology, having realized it’s better to have decentralized technology and more distributed solutions that can be tied together. Instead of being tied to legacy systems with multiple points of failure, they can essentially pick and choose services from different providers.

Another area of growth lies in emerging technologies such as blockchain, which are moving to the forefront. The interest around blockchain started with cryptocurrencies, but the same technology is now impacting organizations. Mortgage companies are looking at which functions that were dependent on centralized databases can now be distributed out with increased security. All these things are good for mortgage banks and their customers as well.

How does your research and development arm gauge what the marketplace needs in terms of new product development
Sakar: Our customers drive our research and development process. We get requests from our customers to run what we call accelerators on recent emerging technologies. We then create products that have significance to their organizations that are either immediately implementable or we create a pathway toward implementation.

Much of the demand we see is for immediate workflow solutions as well as support for system administration and security. We are also asked to build workflows on top of legacy solutions to allow seamless transfers of data on a database level or workflow level, so all a company’s systems can work together better. In the near term, what customers are currently worried about is system integrations, which is a big area of our practice.

Borrower demands are also driving today’s marketplace needs. These days, consumers are looking to do business with companies that make their lives easier. We realize the mortgage process is very difficult for the borrower to understand, so a lot of our focus is on user interfaces. This is particularly important for servicers. For example, borrowers need access to information from their servicer that is available everywhere, whether the borrower is using their cell phone, an iPad, website, or a phone call. They don’t want to be searching a servicer’s website for what they need—they want to be able to get in, get the info they need, and get out.

We also realize that the mortgage is often just the start of a consumer’s financial journey, yet most systems are built just for mortgage processes. As a whole, lenders and servicers have not been very capable of selling other types of financial services, such as auto loans and savings accounts. So, one of the things we see as part of the transformation is not just a seamless mortgage experience but a seamless financial experience. Most borrowers have one bank, one mortgage lender, one auto lender, and different credit cards. In the future, all these financial services will be linked and more connected, so that every borrower has a financial dashboard.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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