On May 29, leaders from Wells Fargo, CitiMortgage and loanDepot got together for a HousingWire webinar focused on COVID-19’s impact on digital innovation across the mortgage space.
Taking part in the “Social Distancing Paves Way for Digital Proximity” discussion were Tammy Richards, COO at loanDepot, Wells Fargo head of consumer direct sales and business insights Rakesh Sheth, and CitiMortgage’s managing director and head of fulfilment, Jason Cramer.
The group approached the current market climate with optimism. Sheth spoke about the housing market’s undeniable strength heading into COVID-19. Cramer noted how stay-at-home orders, disruptive as they have been, have not been enough to erode the bond between consumers and lenders. Moderator Karthik Kumar, global head of mortgage practice at Tata Consultancy Services, expressed his excitement over the amount of innovation made necessary by the coronavirus pandemic.
“This crisis has inspired creative thinking to its highest order,” Kumar said. “And our own U.S. mortgage industry has been quite innovative – not just the active exploring [of] all the possibilities of video-based closings, remote online notarization regulators and investors easing restrictions, but enabling remote working by a mammoth and diverse workforce.”
As the talk turned to COVID-era innovation, Richards spoke about how lenders like loanDepot have transitioned to digital solutions for determining borrower eligibility.
“Pre-qualifying customers has never been easier with online applications,” Richards said. “Nobody wants to go face-to-face right now. So, the online application, and also customer, portals are another good way to work with our customer to be able to have communication.”
Cramer talked at length about the improved origination process, explaining how machine learning and robotics process automation have brought the mortgage experience about “two-thirds” of the way toward being a frictionless digital experience.
He said the sticking point remains e-closings and freeing consumers from having to spend hours signing documents when closing time arrives. Rolling out an e-closing platform is especially challenging for large lenders like Citi, who must introduce their offerings consistently across the country, a difficult process when tools like remote online notarization aren’t considered equally valid in every state.
“I think the e-closing piece is the last hurdle to get us to truly frictionless, when we can have every single borrower close electronically if they so choose,” Cramer said.
With in-person home inspections and appraisals effectively put on ice until social distancing measures are relaxed, Kumar asked the panellists about the use of drone technology for appraisals. Richards spoke positively about the ability of drone appraisals to cut down cost and turnaround time for exterior-only appraisals and their usefulness in photographing properties unlucky enough to have been built in designated disaster areas. But she admits there “has to be more alternatives to appraisals to be able to move forward.”
Richards also spoke on the topic of creating a central depository of state property data, an idea she is in favor of after witnessing the challenges lenders have had in attempting to access data at the county level. Without the ability to search property records electronically, data gathering becomes a slow, manual process that eats up capacity and clogs up workflows.
“A lot of the smaller counties that weren’t able to offer search were working with bigger counties to give them their data so they could use [the larger counties’] search capability,” she said. A central depository would eliminate the need for such inefficient back-and-forth.
Wells Fargo’s Sheth says lenders must keep in mind that as incredible as a new piece of tech may seem to them, it may not resonate the same way with clients. The innovations that stick, he says, will be the ones that generate enough consumer demand to support further investment.
“Whether we like it or not, there is always going to be a segment of customers who will not embrace a digitization,” he says. “As a lender, we want to make sure that we are meeting all customer needs.”