LendIt’s second day feature an interesting panel discussion on mortgages titled “Bringing the Mortgage Process Out of the Dark Ages.” Panelists includes Clara Lending CEO Jeff Foster, Blend founder and CEO Nima Ghamsari, Digital Mortgage General Manager Simon Moir, Sindeo CEO Nick Stamos, and SoFi Director of Business Development Joshua Tatum. The panel was moderated by Bankless Times Managing Editor Tony Zerucha.
Moir kicked off the discussion by saying this year’s buzzword is “digital mortgage” and there seems to be a huge focus around the concept.
“It’s all about minimizing stress for the borrower,” he said. “Lenders have to pull data from multiple sources.”
Ghamsari agreed. He said consumers are starting to democratize the digital experience while mortgage companies just want better data and are starting to offer benefits to banks and other institutions for collecting data on their behalf. But he added, “A nice end-to-end solution would both problems.”
Foster noted that when the digital experience comes into conflict with taking on a mortgage, that’s a big deal.
“The nexus is to deliver the digital experience while providing exceptional customer service and education that meets the needs of the customer,” he said. “People also want to take their time, assess the options, and understand what they’re getting into.”
Foster also noted that the digital experience has the opportunity to provide a credible experience for every mortgage customer, but the key is getting the data and the technology to the place where that personal experience can happen seamlessly.
“You can give all the data in the world to the consumer,” said Stamos, “but we try to offer products that are accurate to the situation and not just a bunch of options. They get what they qualify for up front.”
Sindeo’s value proposition is to leverage technology to streamline the mortgage application process while offering access to a marketplace of lenders that fit each borrower’s unique financial situation.
Ghamsari addressed the different needs of consumers and mortgage providers saying “One side needs less friction and one needs more information. Technology is inevitable because it is good at gathering data and delivering rules.”
Moir pointed to Amazon as a prime example of something that was once scary for consumers but is now commonplace. He challenged the mortgage industry to create digital products that will fit the needs of all consumers and not just millennials.
On the other hand, Tatum said, “Under TRID, it’s almost impossible to close a loan in under eight days. Consumer expectations may want things to happen faster, but regulatory structural considerations actually inhibit some of those expectations.”
Ghamsari said the best way to solve regulatory issues is with automation.
“Regulation and technology are well aligned, but historically, there hasn’t been as much focus on technology in the mortgage industry,” he said. “If we focused on technology earlier, we’d be much further along.”
Foster noted that the industry adapted to TRID over time and that a new TRID will come some time down the road. Regulation is always changing.
“The mortgage industry is not a closed ecosystem,” Moir said. “There are a lot of different participants. We’re coming out of the dark ages, but we’re not out yet.” He noted some of the challenges of legacy systems interacting with new technologies.
“We work with about 50 different lenders,” Foster said. “We use the broker model, a one-stop shop for consumers. There is a lot of federal and state regulation so doing business in different states is different. You have to be flexible and build to the consumer first. Build technology around that.”
“You can have all the technology in the world,” he said. It begins with the consumer. If the consumer doesn’t understand the platform, you’re dead.” He also recommended educating the consumer through social channels and educational events.
Ghamsari followed up with an example of a traditional mortgage company trying to leverage the Internet for business, but they required the consumer to log in to three different portals during the application process. He said it’s important for mortgage providers to streamline the process and make it simple for the consumer.
Moir said, “We need to encourage an ecosystem of providers. You can’t do it all yourself.”
Indeed, you can’t. What will bring the mortgage industry out of the dark ages? First, technology, but not just technology. It must be a technology centered around streamlining and enhancing the customer experience. Strategic partnerships and a healthy competitive landscape wouldn’t hurt either.