In just a few short months, COVID-19 has accelerated the digital era to forever change the way consumers approach home buying. This tipping point came after several years of rapid technological growth in our industry. In February 2019, we wrote an article predicting this seismic shift, detailing how mortgage lenders could and should prepare not only to survive the change, but also to thrive in the future digital age.
The trends we developed two years ago, pre-COVID, are now the norm:
Digital is the new normal and technology is now the price of entry rather than a competitive advantage. Consumers can’t tell the difference between digital and offline. They don’t think, “I’m going to fill out a digital mortgage application or I’m going online to apply for a mortgage.” For them, it’s just a “mortgage application”.
Buyers and owners alike are using technology and mobile devices for all facets of their daily lives, and e-commerce continues to function as usual. Smartphones are just phones and digital wallets have increasingly become our “wallet”. Mortgage lenders and real estate agents who don’t provide clients with a digital experience are being left behind.
The COVID shift
The era of the digital shift in mortgage began in 2017, but COVID has exponentially accelerated the rate at which digital applications have been introduced and adopted.
COVID killed the money. In a contactless world, everyone uses Apple Pay, Venmo, Pay Pal and others to make payments easier and more secure. Likewise, COVID has killed paper and manual processes.
When we wrote the “Seismic shift” article in 2019, less than 50% of mortgage applications were processed digitally. Today, it is more than 70% in the big banks, and between 95% and 99% for the biggest producers. 2020 will essentially be seen as a pivotal year, and it will not stop at mortgage applications.
As mortgage and real estate professionals, we need to think about how we meet consumer expectations, while going further to deliver added value beyond the transaction.
A customer-centric and value-driven experience
Much of the digital shift in the mortgage industry so far has focused on how lenders can save time and money by optimizing the speed of applications, processing and origination.
The next phase of the digital shift, however, is less about what it can do for the lender and more about empowering consumers – putting control of the relationship in the hands of consumers.
To be competitive today, lenders need more than just a point of sale and a relationship with a real estate agent. You have to be the kind of coach and advisor that someone would pay to be there the same way they would hire a lawyer. The key to your future lies in your ability to compete on a service experience.
This is a tremendous opportunity for lenders and real estate agents to stay competitive in a world driven by Amazon – something futurist Steve Brown calls “What Amazon Can’t Do” (WACD). We like to add Zillow to that and say what Amazon and Zillow can not do (WAZCD).
Essentially, this means that while the behemoths outnumber local lenders in terms of funding and marketing spend, what they lack is something buyers want and need: advice and support. personal relationship. If local lenders are strategic with this competitive advantage, this is where they can win in their local markets.
Manage the experience beyond the transaction
Most loan officers lose 70% of their old clients because they don’t have the process or the tools to manage the relationship over time. In the new digital age, technology and advice come together for maximum value.
Using automation and digital tools, modern mortgage lenders are free to deliver the most value to their customers. As a result, the top priority today for all modern mortgage lenders is not the loan they give; it is their ability to manage the experience beyond the transaction with personalized advice.
Modern mortgage professionals provide consumers with information and tools to help them manage their home equity smarter, whether it’s payments, debt consolidation, mortgage management, or decision-making. future regarding selling, buying and increasing faster. Mortgage lenders have a unique opportunity to fill a gap in financial planning by helping consumers manage their homes and mortgages as a lifelong asset.
Tools like Mortgage Coach, Domestic robot, Happy House and HomeBinder all grow enormously. And for the local lender, these post-transaction platforms help lenders proactively manage the customer relationship throughout their lifetimes by providing high-value advice that helps them build wealth with real estate in the country. over time rather than just getting a mortgage.
By 2027, the mortgage industry will be completely different. Here are some of the trends we are watching over the next few years:
On the lender’s side, there will be fewer connections. At this time, you need to log into Mortgage Coach, Homebot, your LOS, and your pricing engine separately. Finally, for your cutting edge technology stack – all the technology that runs the mortgage and real estate industry – you will have a single ID.
While currently only a theory, Amazon is well positioned to reinvent MLS. Between the unique buying behavior data they have on nearly every American household, they could become the ultimate disruptor.
Technology becomes fintech
However, the real threat right now lies in emerging banking as a service. Tech companies can take advantage of banking as a service and mark it blank. Or they can overlay it on top of their technology and offer fintech services to their customers. It could become a real disruption in the future.
Lenders who want to evolve towards a customer-centric and competitive experience over the next decade are collecting and amplifying customer feedback online and internally to drive better results.
Following trends is not enough. Lenders must first listen, and then follow, to the customer.
Your future livelihood is at stake
There has never been so much at stake for a loan officer or real estate agent as there are today. There are more loan officers in America who made over 300 loans last year than ever before. There are more loan officers who granted over 500 loans last year than ever before. For the first time ever, several loan officers issued more than $ 1 billion in mortgages. And that wouldn’t have happened without taking advantage of technology.
However, this technology is only the entry point. The competitive advantage is in “WAZCD”. If you are competing only on rate or technology, you will never win. Competing as a trusted coach and advisor is another story.
René Rodriguez says: “If you want someone to love you, don’t try to be loved. Focus on loving and loving the person you are talking to.
Ultimately, if you want to do what Amazon can’t, you have to listen and love the local customer in a way that only you can. Being a modern mortgage lender or real estate agent requires you to use technology to become the best advisor.
Kristin Messerli is Vice President of Financial Services at Experience.com. Dave Savage is the founder of Mortgage Coach.
This column does not necessarily reflect the opinion of the editorial staff of HousingWire and its owners.
To contact the authors of this story:
Kristin Messerli at [email protected]
Dave Savage at [email protected]
To contact the editor responsible for this story:
Sarah Wheeler at [email protected]