NMP - October 2016 - 82

Game-Changing Technology Innovative technology solutions are not on the horizon for mortgage lenders ... they're here By Eric Egenhoefer ore than two-thirds of prospective homebuyers feel overwhelme d by mortgage paperwork and financing details, according to a study by Discover Home Loans. The same poll found that 76 percent of prospective homebuyers under the age of 30, as well as 76 percent of first-time homebuyers, also feel overwhelmed and inundated with information when applying for a mortgage loan. One of the ways the mortgage lending industry can address uncertainty and confusion in homebuyers is to pursue innovative, consumerfriendly technology solutions that streamline and simplify the mortgage application and loan processes. In recent years, the mortgage industry, as a whole, has improved leaps and bounds when it comes to using technology to create a smooth loan process-but we still have a long way to go. Prospective borrowers from up-and-coming generations (such as the Millennials) have high expectations when it comes to technology solutions and information security used M OCTOBER 2016 ■ /BUJPOBM.PSUHBHF1SPGFTTJPOBM.BHB[JOF ■ NationalMortgageProfessional.com 82 during a significant financial transaction. A major reason that generations such as the Millennials seek out mortgage lenders with innovative technology solutions is because they often value ease of use, and a streamlined, efficient process. One of the ways mortgage lenders can appeal to these values is to pursue the method of direct access to borrowers' information and documentation. Direct data to the rescue Today, the data collection process for most mortgage lenders looks the same: when we need W-2s, bank statements, pay stubs, or other documentation from a borrower, we contact them to request it. The borrower then goes through the process of finding the documentation, scanning it, and faxing or uploading it. Once it arrives at the mortgage lender, about six pairs of eyes will eventually look at it-between the loan originators, processors, quality control team and more. This lengthy and cumbersome process is inefficient, at best. The delays that often happen while waiting for a borrower to locate and correctly submit their paperwork-as well as the journey the paperwork takes once it makes it to the mortgage company-are too costly. This data collection process also opens up the possibility of fraud, because borrowers have the opportunity to alter documentation before sending it. Even when the correct documentation is safely in the hands of the mortgage lender, problems or issues with those documents may not be identified immediately. It takes time for loan professionals to thoroughly and carefully review each document. As we all know, in the mortgage industry, every hour matters. Fortunately, technology exists that can address this inefficiency issue. A borrower, in the process of submitting a loan application, can grant access to a mortgage lender to directly obtain certain financial documents pertaining to the mortgage loan from financial institutions or payroll services. How this process works ● When submitting an online loan application, borrowers have the option to grant access to the mortgage lender by selecting their bank (for instance). ● Once the borrower identifies their bank or financial institution, they can log in to their online banking and grant the lender access to certain accounts, such as checking, savings, money market, etc. ● The mortgage lender then electronically receives PDFs of the borrower's bank statements - immediately. This instant access to data has several considerable advantages. First, it's immediate. The lender doesn't need to wait for borrowers to track down, scan, and send the requested documentation. This method also eliminates legibility issues, because the documents are not scanned copies of physical pieces of paper; instead, they are clear, easy-to-read electronic documents. Additionally, it's a reliable method of data collection that drastically reduces the possibility of fraud. Because the information is coming directly from a trusted source, such as a financial institution, there is no opportunity for the borrower to manipulate the information before the lender receives it. But perhaps the most impressive, and useful, aspect of instant electronic data collection is that it allows mortgage lenders to run business rules on the documentation. Lenders can program their technology systems to instantly identify potential red flags (or items that require clarification), such as large bank deposits, name mismatches, non-sufficient funds (NSFs), and more. If any of these issues exist, within seconds the system will identify them and immediately send a notification to the borrower indicating that clarification is needed. And the best part? All of this is happening before the mortgage lender even knows that there is a new loan application. So, by the time the lender reviews the application, it is mostly complete, and all major issues have been addressed upfront. This is a significantly more streamlined and efficient way to apply for a loan. Plus, it reduces the burden on the lender to go back and forth with requests for the borrower which, understandably, frustrates the borrower. Mortgage lenders are already beginning to implement this game-changing technology. At my firm, we are actively developing and integrating solutions such as these. Overall, this process of having a borrower grant electronic access to a data http://www.NationalMortgageProfessional.com

Table of Contents for the Digital Edition of NMP - October 2016

Table of Contents
NMP - October 2016 - Cover1
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NMP - October 2016 - 1
NMP - October 2016 - Table of Contents
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