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Ready, Set … Go: The Digitization of Mortgage Origination

cellphoneWhile most borrowers can check the status of their mortgage and make payments via lender websites and mobile apps, many now expect that level of transparency and convenience in the mortgage origination process as well. And why wouldn’t they? After all, that level of instant information has become standard in most consumer purchase transactions.

Lenders that prioritize borrower satisfaction and those that want to effectively compete in today’s world of Internet savvy consumers understand that. Therefore, lenders are increasingly working to make the advances they need to deliver an origination experience better aligned with the way most consumers prefer to do business. This means a digital environment.

Although digitization may include mobile and other technologies, it should not be confused with them. Incorporating digital capabilities is more about the processes and workflow that enable lenders to offer consistent information, functionality and appearance across a range of devices, including desktop computers, tablets and smartphones. Digitization allows lenders to provide consumers with a seamless communication experience, regardless of which device they use at any given point in the transaction.

One of the main reasons lenders are turning to digitization is because it gives consumers the option to digitally initiate a secure mortgage loan application using various platforms. Data gathered in the application process (which can be obtained through a variety of channels) is delivered to the lender’s loan origination system (LOS). Then, the information can automatically be pulled into any of the lender’s branded platform-specific, consumer-facing applications.

This approach enables lenders to control the appearance of their brand while leveraging their LOS to provide consumers with access to consistent data from the very start of the mortgage origination process. Consumers can start the mortgage application on one device, and pick up where they left off on another device without losing any of the data they have already provided.

Digitization also drives a more convenient, expedited and streamlined mortgage origination process beyond the initial application submission. Some loan origination systems are integrated with third parties to speed up the data verification process. For example, income verification can be handled digitally, eliminating the need for consumers to spend time manually tracking down and submitting proof of income from their employer.

Additionally, as the origination process moves forward into the closing phase, digitization can enable consumers to view and e-sign disclosures, and easily access status updates throughout the entire process.

While digitization in the mortgage origination process may seem like a no-brainer, there can be challenges. Some lenders may have technology systems in place that are not well integrated with each other, which can make it more difficult to leverage the technology that enables digitization. Also, requirements associated with regulations like TRID need to be carefully factored into any proposed process shift.

Even so, challenges like these are becoming less of a barrier as enabling technology, like application programming interfaces, make it easier for developers to deliver functionality that in the past would have been much more difficult to provide. As a result, digitization in the mortgage origination process is not only possible, but can give lenders a way to meet consumer expectations for a transparent, omni-device experience they can access at any time of the night or day. Anything less is rapidly becoming unacceptable for many of today’s consumers.

About Author: Jerry Halbrook

Jerry Halbrook is President of the Black Knight Enterprise Business Intelligence and Origination Technologies divisions for Black Knight Financial Services. His responsibilities include overseeing the strategic direction and business operations of the origination, lending and data solutions product suites. He brings nearly 30 years of experience focusing on financial management, technology and operational management. Prior to his position at Black Knight, Halbrook served as a Senior Managing Director at NexSpring Group, LLC, which advises private equity firms, financial institutions, mortgage lenders and service providers on all aspects of strategic and operational issues in the residential mortgage and consumer lending markets. Before joining NexSpring, he served as the CIO for Bank of America’s Consumer Real Estate and Insurance Services division. Bank of America acquired Nexstar Financial, a BPO company co-founded by Halbrook. Nexstar was a start-up venture founded by KKR, specializing in end-to-end residential lending, technology and operations management. Halbrook served as both COO and CIO of Nexstar. In addition, he served as Managing Director of Capital Markets with Citicorp Mortgage, CFO of Prudential Home Mortgage and in Senior Management at Deloitte. Halbrook graduated from Washington University with a Master of Business Administration and a bachelor’s degree in business administration. He is also a Certified Public Accountant
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