CEO of Absolute Home Mortgage Corp. and Mortgage Automation Technologies, the creator of The BIG Point of Sale.
Over the past decade, the mortgage industry has transformed due to advancements in lending technologies. Digital platforms, integrative services and mobile application tools have made it so that lenders are able to communicate with potential and current homeowners more efficiently.
While I often see a natural reluctance when it comes to shifting from traditional forms of lending to a more automated lending landscape, I believe that digitizing in the right way can elevate a business to the next level.
One of the largest issues facing the traditional origination process is how time-consuming and inaccessible the process can be for those involved. Documentation, human processing errors and manual processes can cause bottlenecks that further slow down the process. While I see many lenders beginning to slowly integrate fintech tools into their business operations, I believe that using components individually rather than collectively limits these technologies’ full potential.
I’ve found that creating a tech stack for your company allows lenders to streamline their various software into one, efficient application suite. If you aren’t familiar, a lending tech stack refers to the ecosystem of tools and technology that modern mortgage lending firms use to manage their overall lending operations.
About Tech Stacks
Just like Microsoft Office layers Word, Excel and PowerPoint into one powerful application, a lending tech stack does the same thing by combining the income, asset, employment verification, point of sale and automated underwriting engine into an integrated package. A strong tech stack can further your business by enhancing consumer relationships and decreasing operational costs.
The layers of lending workflow tech stacks can address:
• Customer applications. The first layer in a lender’s workflow is to acquire potential borrowers and collect their financial history and personal data. Integrating income verification technology allows loan officers to manage preliminary data and retrieve income, asset and employment information that can help make your business more organized and easier for you to notify clients if they are missing any important information.
• The loan underwriting process. One of the most tedious aspects of loan origination is the underwriting process. This stage assesses the creditworthiness of borrowers through credit score reports, income verification and employment history. Leveraging systems that integrate into your lending process allows you to streamline the underwriting operation, significantly reducing the time it takes to become a fully approved borrower.
• Verifications and automated data. A well-built tech stack allows for all systems to seamlessly communicate, producing an automated result for internal staff and consumers. If assembled properly, mortgage applicants will know their ability to qualify based on industry standard mortgage guidelines within minutes instead of weeks.
Building Your In-House Tech Stack
Perhaps the most daunting part of digitizing the lending process is building the tech stack itself—with many lenders being overwhelmed with where to even start. When building your in-house tech stack, it is imperative to integrate point-of-sale (POS) software, as this is the first place where your consumers and services intersect. A strong POS system incorporates a seamless website experience and centralizes data, documentation storage, e-signature capabilities and automated pre-qualification tools.
The foundation of your tech stack will be your loan origination software (LOS) which functions to manage your loan applications, generate forms and disclosures, oversee the underwriting process and ensure compliance. Just like your POS system, you will want to consider how it will fit with the rest of your tech stack and ease integration with third-party vendors.
The consumer is central to the success of your business, which is why it is imperative to include strong customer relationship management (CRM) software that maintains positive relationships with your existing base and builds outreach to future homeowners. A good CRM software can increase the value of your mortgage company by delivering a loan experience that bolsters customer satisfaction and generates new mortgage leads. Pairing your CRM software with digital marketing tools such as Facebook and Google ads as well as curated social media content can strengthen the CRM by creating visibility for your brand and services.
A Tech Stack Is Like Building Your Dream Home
I can confidently say that implementing a tech stack has made a tremendous difference in increasing efficiency and ensuring satisfied customers for my company.
Funnily enough, building a tech stack is similar to building your dream home. Your POS system is like the entryway to your house since it is the first point of interaction with your consumers. The LOS is your house’s foundation as it builds out the structure on which the origination process runs. The CRM software and digital marketing tools are the furniture and appliances because they are what keep your consumers happy and build loyalty to your services. Finally, credit and data verification tools are the equivalent of your security system—ensuring all documentation is accurate and legitimate.
The main problem I see lenders encounter when building their tech stack is not considering how all their integrations will work together. A lender implementing a CRM system that doesn’t easily integrate with their LOS software is like buying furniture that doesn’t fit the dimensions of your house. Thus, it is imperative to consider how each of your chosen software and systems will operate within the ecosystem of your origination services.
Previously, creating a comprehensive tech stack was a daunting and costly process. There were only so many software and technological vendors on the market, which made picking slim and expensive. However, the advent of the digital mortgage age has led to a boom of fintech and software companies that make it possible for lenders of all sizes to build their perfect tech stack. With the right one, the operations of loan underwriting, customer acquisition, data processing and loan servicing will be fully covered—consequently giving your business that competitive edge.
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