A New Home, A New Life

Improving The Borrower Experience

John stands on the sidewalk admiring the home he just

put an offer on. He imagines the life he will build here
friends over for cookouts, maybe starting a family,
putting down roots in a community. And then he thinks
about the hoops hes jumping through trying to line up
the financing. Forms, applications, find and scan stacks
of financial statements, more forms. Suddenly, moving
back in with Mom and Dad seems like a good idea after
all.
A loan should be an exciting part of reaching the
dream of owning a home. Or at least, not the confusing,
complex and irritating process that it is today.

The truth is, buying a new home is a major

milestone in a consumers life. Lenders realize this

on some level and have long referenced this in their
marketing material, but have traditionally been less
able to focus on the consumers experience during
the loan manufacturing process. With a minefield
of investor and regulator rules to traverse, making
sure that the consumer is enjoying the process
has traditionally been relegated to a much lower
priority.
That has changed, in large part due to regulatory
pressure from the industrys newest overseer,
but also because competitive pressures in a
consolidating industry and a rising purchase market
are driving lenders to focus more on the borrowers
experience. Today, lenders are very interested in
delivering a great experience to their borrowers.
They realize that there are many advantages to
doing so that go well beyond the mitigation of
noncompliance risk.
But how exactly can lenders ensure that borrowers
find the loan origination process just as exciting
as putting the key into the front door of their new
home? It starts with a better understanding of what
impacts the borrowers overall experience.

WHAT IMPACTS

The Borrowers Experience

Todays consumers expect an intuitive,

simplified loan application process.
-Deloitte

Make it simple, clean, and tech-driven

for a differentiated experience.
-PricewaterhouseCoopers

There are many things that can make a person regret

starting the loan origination process, but they pretty
much all fall into one of four major categories.

1. Level of overall confusion with the mortgage loan process

Through our eDisclosure work, weve
found that consumers are most satisfied
when they can move through the process
quickly and without confusion. They
want to feel like they are in control of
the information flow and they can be if
the documents are delivered quickly,
accurately and electronically.

As Deloitte pointed out in a recent

white paper, todays consumers expect

an intuitive, simplified loan application
process, whether it is delivered in person
or over the Internet.1 They want to
understand it or, as one of our clients once
said of our process, to make buying a
home seem as simple as buying a car.
Its important that the customer feels in
control and informed of what is going
on in the home buying process. That
often means delivering information in the
manner in which the consumer wants to
receive it. 2 Connecting easily and offering
an open line of communication with
borrowers is an excellent way to make this
an exciting time in their lives instead of a
confusing, stressful mess.

2. Confidence in their lender and the accuracy of mortgage documents

Errors on mortgage documents erode the consumers faith in the lender they have chosen. In
the past, this happened most frequently at the
closing table and there was some question in the
borrowers mind as to whether the lender or the
closing agent was at fault. Both parties tended to
hide behind this fact. The overall risk of losing the
deal was low because the borrower, after weeks of
hard work, was within sight of the goal. They rarely
walked away from the table, even though they were
rarely delighted with the process.

Today, new TRID rules require the lender to

provide information to the borrower much sooner

in the process, giving them plenty of time to determine whether their chosen lender can get it right
or not. Consequently, the need for accuracy in the
mortgage documents provided to the consumer
has never been higher. Failure to deliver accuracy
is already resulting in lost deals. Accuracy is one
step toward trust and is vital if the lender hopes to
create an exceptional borrower experience.3

3. Confidence in the security of their personal financial data

While its true that Millennials are more likely to
live in the online world and take interacting with
electronic systems as a matter of course, they
also demand a high level of data security from
the vendors they work with. Failure to meet these
requirements will cost lenders more than the
current deal as those borrowers will spread the
news of any failure far and wide.

Of course, its not just borrowers who are

paying attention to the way lenders secure

the information they collect from consumers.
The CFPB is also watching closely and noncompliance comes with a heavy price.

4. Speed to close
Ultimately, this is the home loan borrowers biggest concern. They know
they must have financing arranged and ready to be delivered in advance
of the contract date or they run the risk of losing the new home. In markets
where inventory is low and buyer demand is high, speed to close becomes
critically important. We list it last, but really speed is one of the consumers
primary concerns, if not their highest.

In our experience, the faster the mortgage loan process

moves, the happier the borrower will be. Coming back to

the borrower for additional information or to gather updated
information slows down the loan process and irritates
consumers. Collecting the wrong information or, worse, losing
information already collected can lead to losing a deal. In the
end, borrowers dont care about the technology the lender
uses, the partners it chooses or the forms they have to sign,
as long as the loan gets done in time.

Delivering

an excellent borrower experience

Make it simple, clean, and tech-driven

for a differentiated experience.
-PricewaterhouseCoopers

A new home truly is the beginning

of a new life for the homebuyer.

Now that we know what consumers are looking for, and the section

above comes from decades of experience supporting lenders in this

area, what must the industry do to make good on this promise? Lenders
have the capacity to deliver excellent borrower experiences today, but it
requires them to make the right decisions about the LOS and document
management technology they employ, the processes they follow and the
partners they choose. Here are some suggestions for delivering the kind
of experience your borrower is hoping to receive.

1. Choose document management technologies that enable paperless lending

Studies have shown that keeping your processes electronic will
speed up your loan process, reduce your errors and increase
customer satisfaction.4 Technology that can enable a smooth loan
origination process is available now. Seek it out. Weve spent decades
developing the technologies we offer the industry today and our
dynamic loan documents, electronic document delivery and e-signing
capabilities are more than sufficient to meet the needs of todays
lenders and consumers.

TODAY, there is no real alternative to having good document

management technology as compliance with federal, state
and local regulations as well as investor requirements will slow
the entire mortgage loan process to a crawl without the right
automation. Furthermore, full compliance is virtually impossible
without document management automation. There is no better
way to frustrate the borrower.

The technology lenders choose must, first and foremost, speed up

their processes. It must also ensure accuracy wherever possible
and reduce the manual work that leads to human error. A side
benefit of using the right loan document tech tools is that it will
free up employees to hold borrowers hands, handle quality
assurance, and advance the business in many other ways. When
lenders have confidence in the systems they use, it frees them up
to use their resources to better serve their customers.

In what is still one of the best white papers on the topic,

PricewaterhouseCoopers wrote, Lenders have the opportunity
to make the mortgage process more convenient and efficient
for borrowersmake it simple, clean, and tech-driven for a
differentiated experience.5 This has never been more true.

2. Encourage employees and borrowers to execute electronically

When lenders take the time to train their borrowers from the beginning to accept,
process and execute mortgage documents electronically it speeds up the entire
process. As the next generation comes of age, this is becoming easier to do, as
they were raised online and already possess the skillset required. For more mature
borrowers, a bit of hand holding in the beginning will pay big dividends as the deal
progresses to the close.

One easy win in this area is the eDisclosure process.6 We have

worked very hard over the years to help lenders deliver a premium
experience through the delivery of electronic disclosures. When used,
it builds confidence on the part of the borrower from the first moment
they interact with our software. The system allows borrowers to see
the documents they have been given, which ones they have signed
and when, and which ones still need to be signed. Our experience
clearly indicates that electronic signatures create a better borrower
experience.

3. Integrate mortgage loan documents tightly with your LOS for two-way data transfer.
Most loan document management providers claim to offer a seamless integration
with the lenders LOS, but few actually offer it. Find out what support exists within
the document providers shop specifically allocated to make sure its software
works with that provided by your LOS provider. There should be a complete team
available to handle integration issues with your current LOS provider.

For increased data security, make sure that your document vendor is

only holding onto the borrowers data long enough to do its work and
then purging it out of their systems. That information is all safely tucked
away inside the LOS; the document vendor shouldnt need it.
But a tight integration does more than just provide a seamless borrower
experience and data security. It can also provide event triggers that can
be used by the lenders LOS automation to trigger workflow events.

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4. Use loan document management system to builid a data-driven workf low in the LOS.
This is currently one of the most exciting opportunities available to lenders that
work with the right document provider. There is a wealth of information captured
during the document delivery and signing processes. When this information comes
back into the LOS through a seamless connection, it can trigger workflows that
save time, improve efficiency and increase overall customer satisfaction.

The most important of these data elements will tell the

lender when the borrower looked at the documents, how

long they spent reviewing them and when they were
executed. With this information, building data-driven workflow
automation is much easier. There are too many benefits to
this to go into in this paper as it deserves its own treatment,
but suffice it to say that data driven events will be the
standard in the near future.
Knowing in advance that the document provider can provide
fully compliant loan documents will help the lender avoid the
temptation to order or develop custom documentation for
new loan programs. This is one of the most serious mistakes
a lender can make as it is often unnecessary and almost
always opens the lender up to increased risk.

5. Work with a document vendor that can provide fully compliant loan document sets.
Lenders are encouraged to spend sufficient time upfront to fully vet
their document provider. The lender must know and feel comfortable
with how the documents are generated, secure in the knowledge
that they are exactly what the investor hopes to see and that they
meet all regulatory compliance requirements. Without this very high
degree of confidence in the lenders current document provider, the
lender must conclude that they have chosen the wrong partner.

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Finally, lenders should take care to work

with a vendor partner that can provide fully

ADA compliant documents. While its not
particularly common that lenders must meet
the special needs of disabled borrowers, when
it is necessary it is required by law that they do
so. This can be challenging for lenders who are
not already working with a document vendor
that can provide documentation in a fully ADA
compliant manner
The recommendation is to work with a mortgage
document vendor that already has the right set of
documents for the loan programs the lender is selling
or who can create them dynamically to meet the exact
requirements of any new loan program. This is easier if the
document vendor already has existing relationships with
the investors the lender plans to sell to.
In our own shop, we have expended a great deal of
energy to build relationships with investors on the back
end for the various programs they are offering lenders.
By coordinating with investors in advance, we can be
sure -- and by extension the lender can be sure -- that the
documents will meet the investors needs.

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Summary

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By taking these recommendations to

heart, lenders can meet the needs of
todays borrowers and improve overall
customer satisfaction.

A new home truly is the beginning of a new life for

the homebuyer. It should start out on a very positive

note. If it does, the lender will benefit in many
ways, including more repeat and referral business,
positive testimonials for the marketing department,
a generally more efficient and profitable operation
and lower overall compliance risk. Following the
suggestions outlined in this white paper is a path to
that outcome.

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1 Monson, So, Rossiter and Chu, Retail Lending 3.0, Boosting productivity and
improving the customer experience, Deloitte, 2012.
http://www2.deloitte.com/content/dam/Deloitte/tw/Documents/strategy/tw_strategy02.
pdf
2 Feingold, Jean, Meeting Customers Where They Are, ABA Banking Journal, Aug. 25,
2015. http://bankingjournal.aba.com/2015/08/meeting-customers-where-they-are/
3 Balakrishnan, Ramani, Enhancing Customer Experience in the Mortgage Market,
TATA Consultancy Services, 2015 http://www.tcs.com/SiteCollectionDocuments/
White-Papers/BPS-Enhancing-Customer-Experience-Mortgage-Market-0815-1.pdf
4 Mortgage Customer Satisfaction Increases as Lenders Adopt New Technology,
Improve Efficiency, J.D. Power, Nov. 16, 2015 http://www.jdpower.com/pressreleases/2015-us-primary-mortgage-origination-satisfaction-study
5 DAlessandro, Paul and Hernandez, Roberto, Lock in Loyalty, Coming to terms
with the new borrowers needs, 2013. https://www.pwc.com/us/en/advisory/customerimpact/assets/mortgage-lending-customer-insights-us-experience-radar-2013.pdf
6 Skiles, Dan. E-Delivery, Are You Doing Your Part for Your Clients, ThinkAdvisor,
June 26, 2012. http://www.thinkadvisor.com/2012/06/26/e-deliveryare-you-doing-yourpart-for-your-clients?slreturn=1464217716

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