Here’s why mortgage tech innovation must extend beyond point of sale

Lending

On a bright sunny Sunday in El Pueblo de Nuestra Señora la Reina de los Ángeles, in the beautiful LA LIVE entertainment complex at the MBA’s National Technology in Mortgage Banking Conference, there was a unique confluence of CIO and industry leaders.  The first annual CIO Summit sponsored by Tavant Technologies brought together leaders from within the mortgage industry to discuss challenges they face as individuals, as companies and as an industry, and to exchange ideas on how to meet these challenges and help rebuild the mortgage industry.

“We wanted to create a forum where technology leaders with varying backgrounds, all vested in the lending industry, can foster relationships and collaborate to drive innovation in the industry,” said Hassan Rashid, EVP of sales and marketing at Tavant Technologies.

The invitees included CIOs, CEOs, COOs and technology leaders from banks, independent mortgage companies, service providers and technologists. 

The events began with a “fireside chat” with Barry Libenson, global CIO for Experian, hosted by Sarvesh Mahesh, CEO of Tavant Technologies. Libenson provided the audience with a unique perspective of managing a global data center managing over 1.5 petrabytes of data. 

Libenson and Mahesh fielded questions from the audience and discussed topics from the challenges of managing the highest levels of data security to the increasing role of alternative credit models in the lending industry. Libenson’s unique perspective on the regulatory changes and technology innovation happening in the industry gave the leadership present a view of the changing landscape and how Experian as a service provider in the industry is adapting to meet the evolving needs.

Another panel discussion at the summit covered whether and how mortgages can be originated 100% online. The panel included Jeff Javits, CIO of Fremont Bank, Stan Pachura, former CIO of National MI, and Diego Guayan CTO/COO of Employee Loan Solutions

The panel tried to define what a digital mortgage is and what it means to be paperless. They concluded that there are many challenges in fully funding a loan but the need of a consumer to get a clear, binding decision as early in the process as possible is of definite value to the consumer.

“The expectation of rapid mortgage funding has already been raised with our customers, and all of us in the mortgage business need to move towards mobile interfaces, process automation, and faster overall processing time, especially if we want to capture the next generation of homebuyers,” Javits said.

The panel went on to discuss how innovation in the industry, which has the ability to integrate asset, income and employment information rapidly into its processes, was now more readily available. Integrating these technologies in our consumer’s online experience is the cornerstone of providing them a new type of lending experience.

The panel discussed how these innovations can and should also be clearly leveraged within the fulfillment process as well. 

Pachura cautioned, “As lenders focus more and more attention on providing an engaging customer experience for all borrower segments and continue the pursuit of an electronic and paperless mortgage, they must ensure that they don’t frustrate the customer in the process.

“Providing transparency to an existing process that is inefficient and inconsistent after an well-organized and rapid initial approval experience will upset the borrower and likely result in negative comments and complaints.”

Collectively, the group felt that leveraging technology innovation throughout the lending process was a key to how we move the industry forward.  The innovation is not just at point of sale but must be woven throughout the fabric of the origination process. 

Recalling the recent CFPB pilot on eClosing, Javits recounted, “An evolution in notarization might mean videoconferencing with a notary and holding your ID up to the camera. But we may be on the verge of a revolution, where biometrics combined with Blockchain authentication may eliminate the human from this process entirely, resulting in a much faster and more convenient closing without sacrificing verification of identity.”        

Finally, the panel concluded with a discussion on whether the industry should pursue these types of changes. Should we pursue more rapid, streamlined verification of income, assets and employment?  Should we move towards a faster origination process? The active participation and exchange with the audience was a resounding “yes.” 

The audience overwhelmingly felt that these new approaches were in the best interest of the consumer when combined with education of the borrower. When we as bankers take the initiative to ensure the consumer understands the innovations and recognizes how it benefits them, it improves the process and results in better decisions. 

These innovations allow us as an industry to originate more quality loans. The audience felt it was not a matter of if, it was just a matter of when their organization would adopt these tools.

The keynote event during the forum was an address from Gary Clark, COO of Sierra Pacific Mortgage. Clark focused on New Age Technology for the Digital Mortgage. Having served previously in an IT leadership role at IndyMac Bank, he was able to provide the audience with a unique perspective on how technology has changed our industry and as an executive at Sierra Pacific Mortgage he is finding new technology solutions that can be leveraged at SPM to drive innovation and growth.

Clark spoke of market “disrupters” who are continuing to change the online experience. Focusing on usability, decisioning and communications, he helped the audience correlate customer satisfaction data with adoption and utilization of technology in the lending process. 

Clark discussed the future of the lending market and how as lenders we strive to balance the cost of originating loans by leveraging innovative tools and enhancing our processes. He concluded with sound advice on how SPM is leveraging partners in the industry, building a strong network of strategic partners who are all collaborating to drive results.

The summit also witnessed the launch of Tavant FinConnect, a modern mortgage data and services hub that connects the internal and external systems of the mortgage ecosystem to enable a digital mortgage experience.

Ben Sizemore, CIO at First Guaranty Mortgage Corp. said, “It was great to be a part of the inaugural Tavant CIO Summit. It provided us an opportunity to network, discuss the future of mortgage technology and the business drivers that could enable innovation.”

Rashid concluded the event noting that next year he hopes to make this forum a broader event with an expanded focus, a forum where leaders can openly help to identify solutions, drive innovation and help build a strong lending industry.

And in the spirit of collaboration, as mortgage bankers tend to do, we concluded the event with cocktails.

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