If, like everyone else, you’re struggling with implementing a digital mortgage experience, or you’re in the market for some point solutions in the mortgage industry, the 3rd Annual Digital Mortgage Conference in Las Vegas was the place to be.
Compared to most conferences, the format was refreshing. Rather than speeches and panels, system demonstrations dominated the agenda. Each vendor was provided a strict 8-minute time-slot in which to showcase its product without interruptions or questions, and then the product is critiqued and scored in an American Idol style format. While an 8-minute demo doesn’t really provide the opportunity to get gritty, it was a great opportunity for vendors to showcase their products and a great way for lenders to familiarize themselves with less mainstream, point solutions.
Here are my key takeaways from the conference:
- Definition Disagreement – There is (still) no agreement on what a digital mortgage means. Much like the nebulous ”omni-channel” description, “digital mortgage” is intended to portray a utopian view of where lenders would like to be. To some, a digital mortgage means going paperless (yes, some are still not there), whereas for others it means processing the entire loan file with as little human intervention as possible. Most lenders are shooting for somewhere in between.
- Vendors First – Make no mistake, this is a vendor conference. There were 33 different vendor demonstrations, almost all of which were point-solution providers vs. larger industry players. The number of community banks and credit unions in attendance could be counted on one hand. Sure, the big guys like Bank of American and Quicken and some of the regionals were there, but none of the community banking lenders that are really struggling with implementing a digital mortgage process. In a market where compliance costs range anywhere from 25% to 30% of a lender’s overall cost to originate, in combination with rising rates and declining volumes, I expected more participation by community-based lenders. However, a pass may be in order as competing MBA and ACUMA conferences likely tapped calendars for all the lending leaders.
- Some Assembly Required – Today’s digital mortgage is the sum of its parts. Your LOS provider isn’t going to get you to a fully digital mortgage today. Not yet. Paperless, yes, but not fully digital. There are a litany of services that have to be leveraged across multiple providers, including CRM, online/mobile applications, appraisal management, borrower collaboration portals, e-sign and e-closing, and not all of the moving parts are fully baked.
- Johnny 5 is Alive – Artificial intelligence (AI) and machine learning are the future in the mortgage lending business. Demos and hallway chatter at the conference intimated that AI is going to have a huge impact on lenders’ shops. Lenders must be ready to deal with the personnel ramifications of staff working alongside technology that will not only be supporting but in some cases supplanting their day to day tasks. It’s interesting that everyone seems to have a different interpretation of AI and machine learning. The best working definition I heard came from Mona Kahn at Fannie Mae, who simply said, “AI is the ability to use automation to work with data.” There were a few vendors where AI was front and center such as PromonTech’s IncomeAI product, which analyzes the actions and decisions of underwriters to start making its own recommendations, and Maxwell, which can analyze conditions placed on loan files to start auto-assigning loan conditions after the initial application. As lenders are forced to improve efficiency and drive down costs, this type of automation is going to become table stakes.
The usual suspects were in attendance: Blend, Roostify and various LOS vendors. But a few demos stood out from the crowd:
- LoanLogics – Offers pre- and post-close QC and insight into the quality of a loan file, a HMDA audit product and out-of-the-box integration with ComplianceEase.
- Spruce – Coordinates all closing activities upon “clear to close”—notify borrowers, schedule a notary, send docs to the borrower, and confirm wire instructions.
- Anow – Appraisal management tool that facilitates scheduling, mapping, logistics and communication of appraisals in order to speed turn-times. Think Uber for appraisals, but really for shops that have a large appraiser pool to manage.
- Notarize – An online collaboration tool that facilitates communication of the loan closing between all interested parties, delivers loan documents to the borrower in advance of closing for review and signing (non-notary docs), and allows for a 24/7 online loan closing experience. FYI – Notarize won the Lending Tree Innovation Challenge, the conference’s demo competition.
- Joe Tyrell from Ellie Mae said their data shows that 92% of borrowers will research their lender online before applying for a loan.
- From lenders who have already started creating a digital process: “The hardest part was building system integrations.” (This, ironically, runs counter to what most vendors say.)
- John Schleck from Bank of America said, “A mortgage should be easy, but you shouldn’t be able to butt-dial a mortgage.”
Lenders, keep attending events like the Digital Mortgage Conference to stay current on the industry’s latest technology offerings. But while you’re soaking up all this new knowledge, don’t forget that a successful digital mortgage strategy will require not only the technology to automate the application experience, but also a full understanding of your institution’s desired future state.