July/Aug. 2019 Issue

Rising Above A Challenging Landscape: Leveraging A Comprehensive Lending Technology Framework

The mortgage lending landscape is always changing, and the solutions created for yesterday’s challenges may not help new roadblocks that arise. At a high level, the themes are like the issues lenders always face: high origination costs, margin compression, constantly fluctuating rates, and changing regulations. Of course, the devil is in the details. For example, when it comes to interest rates, industry experts like the MBA, Fannie Mae and Freddie Mac speculate that rates could rise to nearly 5 percent by Q4 2019. This creates unique opportunities and challenges for lenders.

As the fed raises rates to slow inflation, home values have already seen a significant increase, surpassing $15 trillion according to MarketWatch.com.  As a result, more and more lenders are promoting home equity loans and home equity lines of credit as an additional source of lending business.  As lenders migrate toward home equity loans, lenders also face a high demand for faster closings. Today’s borrowers expect a quick and painless experience from their lenders, but the state of the industry today makes it difficult to always deliver.  The tools for end-to-end, digital, and paperless lending are out there, but too often lenders must put together a piecemeal solution of software that may or may not work with the other pieces of their technology infrastructure.  And, that’s one of the biggest challenge’s lenders face: with more technology solutions than ever before, it is both more important and more difficult to choose the one that is right for them and their specific needs.

Top Priorities: Speed and Efficiency

To solve the problems lenders currently face, the solution must deliver two key benefits: speed and efficiency. Efficiency gains can come from many different areas. A solution that reduces any human error or duplicate data entry certainly improves efficiency and accuracy. A solution that consolidates vendors into one platform can also create efficiency, as lenders do not have to spend time searching for different solutions from different vendors. When all the work from different vendors is available in one instant report, lenders can save precious time while staying confident that they have all of the information needed to do their job.

These efficiency gains help lenders save money by also saving time. Lenders are can reduce turn-times and closing times while simplifying and streamlining their workload. This makes lenders more productive, allowing them to do more with their time. Increased efficiency naturally results in increased speed when it comes to fulfilling a loan.

Time and cost savings clearly benefit the lender’s bottom line but choosing the right technology solution provides additional benefit. These time and cost savings most importantly improve the lender’s relationship with the borrower. Faster turn-times and closing times help keep borrowers happy, as they receive their loans faster. In addition, cost savings for lenders can easily mean cost savings for borrowers. Money saved is another way to ensure borrowers are satisfied with their experience.

In today’s landscape, there are plenty of challenges for lenders to face, but this abundance of challenges creates an abundance of opportunities for lenders to use technology solutions to their advantage to rise above the competition. When lenders find the right end-to-end solution, it enables them to rise above the challenges of the industry while giving borrowers the experience they are looking for. With the right solution, lenders can streamline their workload, keep borrowers happy, and remain profitable and competitive in the industry. Solutions that do this empower lenders to confidently face the challenges presented by an ever-changing lending landscape.