“In the past year, I secured a home loan, a car loan and a solar roofing loan,” says STRATMOR Group’s Mike Seminari. “And to this day, I still don’t have the slightest idea what any of my loan officers look like.”
Seminari’s purely digital loan experiences are emblematic of most young borrowers – fused to their phones for both work and leisure and brought up in a culture that values convenience over pretty much anything else. How should originators trained to believe in the relationship-building power of the “personal touch” be trying to appeal to potential clients for whom the personal touch often equates to a couple of taps on a screen?
As Seminari explains, his loan experiences varied in terms of his own satisfaction. The car and solar loans were a breeze: The application process took about five minutes for each and neither required the services of a loan officer. But his completely online home loan – the riskiest, most expensive, and most complex of the three – was a different story.
“In my case, I was very uncomfortable with the impersonal framework of one of the largest lenders in the nation,” Seminari says. “I had to call for updates, was asked multiple times for the same documents and I even had to correct a few of their paperwork mistakes.”
Seminari’s loan closed successfully, but he says he would neither return to nor recommend his lender. The digital tools at his disposal were helpful, but they came at the expense of customer service.
Lenders and originators are sometimes left scratching their heads when it comes to appealing to millennials and other members of the first-time buyer population. Do they want digital or do they want traditional? The secret might be more along the lines of “tradigital”.
Back in 2016, over two-thirds of millennials were choosing the convenience of mobile banking over its brick-and-mortar alternative. They’re not coming back, so it’s critical that originators meet them on their level and invest in providing the easiest, sleekest, coolest online experience possible.
But according to Turnkey Lender, millennials are also “looking for a lasting and stable relationship” with a brand. That’s a hard thing to establish using a purely digital framework.
Seminari’s research for STRATMOR’s MortgageSAT Borrower Satisfaction Program found that 87 percent of first-time buyers choose their lender “because of a personal referral or existing relationship.” These buyers have proven to be more satisfied, and more likely to give higher Net Promoter Scores, when they receive a personal call from their loan originator than if they only receive text or email updates.
“Although they do like automation when it makes their lives easier, many millennials, like baby boomers, also insist on being able to speak to a live person to get their questions answered,” says Bank of America senior vice president Kathy Cummings. “The ability to transition from a digital application mid-process to speaking to a lending officer to get questions answered, a.k.a., the omnichannel high-tech, high-touch experience, is key to delivering the solution clients want.”
Seminari says even the most digitally devoted originators must make themselves available during the closing process in case there are any unpleasant surprises or errors hiding in the closing documents. The originator’s physical presence at closing, he says, often determines whether a borrower leaves the transaction as either an NPS “promoter” or “detractor”.
Providing both a personal and digital experience shouldn’t require outsized investments on the part of originators. Seminari says that simply using phone calls as their primary update vehicle or as a way of going over documents shortly before closing can work wonders. For brokerage owners running a team of loan officers, he encourages them to incentivize their staff to attend closings in person.
“Run a contest for a parking space or a rotating trophy or a picture on the wall,” he says. “Use photos from closings for social media promotion and monthly newsletters. The important part is making closing attendance part of company culture.”