As more brokers juggle multiple lenders, the goal is to erase the differences between them
Wholesale mortgage brokers offer borrowers a choice of lenders that a retail loan officer cannot. That choice comes with a trade-off, since each lender a broker works with tends to run on its own portal, its own workflow, and its own set of rules.
That fragmentation grows more consequential as more of the industry's volume moves through the broker channel. As brokers continue to approach a third of the originators in the market, the tech side becomes a bigger focus.
Because so many lenders use a variety of software in the loan process, brokers are left managing a patchwork of systems just to get a single loan across the finish line.
Will Jung (pictured top), chief technology officer at nCino, said that patchwork is the real source of friction in wholesale lending, more so than any single lender's underwriting speed.
"The wholesale lender technology environment is quite fragmented," Jung told Mortgage Professional America. "Each lender will have their preferred portals. They'll have their own processes, different tech stack workflows, and sometimes the lenders have a retail arm versus a wholesale arm. So that creates additional fragmentation. Then the information isn't always clean. There's a lot of handoffs, duplicate information requests, a lot of back and forth."
Overcoming wholesale fragmentation
Jung said that roughly a quarter of US mortgage originations in the first quarter of this year went through wholesale. When there is technology fragmentation, it ultimately impacts the borrower, even though the broker relationship overall gives them an advantage.
"You get the benefits of going through a broker from a borrower experience perspective, but then there's a lot of handoffs," he said. "So if I think about that ecosystem experience, how do we make sure you get that seamless borrower experience, which means in turn you have to give a seamless broker experience, which in turn means then from a wholesale lender perspective as well, they all have to go together."
He said the fix requires rethinking more than just how brokers log into a portal.
"That's really where the next phase or the challenge that we're trying to solve here is how do you connect the people, the information, the process, the actions for that single loan transaction, regardless of how it entered the lender," he said.
He said that same philosophy carries over to how nCino thinks about artificial intelligence specifically.
"Whatever technology you're using, you need to make sure it's driving the right experience," he said. "With new technology, you want it to almost be invisible. You don't want to have to have a PhD in prompting to understand AI and how to do it."
Reducing the friction
To help reduce fragmentation, nCino is launching a third-party originator experience built directly into the same point-of-sale system lenders already use for their business.
"Lenders can invite third-party originators to submit loans through the same POS that they have that supports their retail business," he said. "It still preserves the channel designation, broker information, the business rules that are specific to wholesale, but you don't have to learn a whole different system, a whole different process. At the end of the day, a mortgage is a mortgage."
He said that by making the process consistent, it benefits both the broker and the borrower.
"A borrower can apply, they can upload documents, they can track the loan status. It's a consistent experience regardless of whether they're going through a retail loan officer or broker," he said. "Retail and wholesale doesn't necessarily have to feel different, and you're still getting the benefits of competition."
Jung said the industry's focus on faster underwriting decisions overlooks where most of the actual delay happens.
"The real friction in mortgages isn't just the underwriting decision. A lot of people just focus on the decision," he said. "It's really the back and forth to get there. If you just focus on the decision and you miss the stages up front with the back and forth, your decision is fast, but getting there took a long time, and it was painful."
He said that same friction is what keeps brokers from spending time on the part of the job that grows their business.
"A lot of times brokers spend a lot of time really just massaging the process," he said. "I'm sure they want to spend their time building relationships, understanding the customer's needs, and building out their business. Right now they're time poor because they can't."
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