Talking Digital Mortgage Transformation at SNUG 2021

Lenders and vendors alike have been forced to grapple with rapidly changing borrower behaviors and expectations over the past year, as the pandemic accelerated the already growing desire from borrowers for digital tools and efficient closings. Lenders who lack the tools to meet these expectations found themselves scrambling, and vendors whose platforms were unprepared for the rise in volume were left exposed. As expectations change, lenders and vendors who resist will begin to stagnate - as Reggora CEO Brian Zitin put it, “if you don't adapt now, then I don't see how in eight years from now you're going to still maintain some of that market share.”

As part of the 2021 SimpleNexus User Group (SNUG), Brian joined several other thought leaders in the digital mortgage space for the “eMortgage Expertise: Best of Breed Partners” panel which covered all things relating to digital mortgage transformation. Below are a few brief excerpts from the session, providing some of the most valuable takeaways.

The Impacts of COVID-19

Moderator Shane Westra, Chief Product Officer at SimpleNexus, kicked off the session by asking the panelists how their respective businesses have dealt with the impacts of COVID. 

Brian answered, “well first of all I appreciate you having us here … appraisal has always been that ugly stepchild where it's like, ‘all right, it's working, whatever.’ Only now, it's holding your entire pipeline and really causing problems for a lot of people, so it became a big focus.”

“Lenders are no longer tolerant of processes that are inefficient or that worked. Because now, when you're dealing with three times the volume, it really exposes those weak links.” He went on to point out “with the global pandemic, the last thing you want to do is talk to a stranger. The entire industry of appraising is sending a stranger to your home and interacting with you.” As a result, “now even the regulators are really looking at things. So it's going to bring a bunch of interesting questions.” 

Many of these interesting regulatory questions were addressed in the recent FHFA Hearing on Appraisal Related Policies, where Brian and Reggora’s Head of Appraisal Compliance and Initiatives, Ken Dicks laid out some important points on the future of residential real estate valuation. 

Sue Woodard, Chief Customer Officer at Total Expert, summed up this rapid push towards digital mortgage wonderfully, “sometimes there's risks to making moves, but I think last year and even now, there really was this thing of ‘there's a risk not to move.’” As record high volumes expose process gaps, it certainly has become riskier for many lenders to stick with current sub-optimal workflows than to implement a new solution.

The Phenomenon of Appraisal Waivers and Flexibilities 

Shane moved on to ask the panelists if there were “any surprises with particularly how the borrowers have reacted to the situation over the last year or so?”

Brian discussed a phenomenon that he’s noticed surrounding appraisal waivers and flexibilities where the appraiser doesn't have to go into the property.

“In a lot of people's minds, people would think, ‘oh, the borrowers would love that. It's less intrusive, probably faster.’ But some borrowers were the opposite, and they're like, ‘well, is the appraisal going to come in low? I want to show them this particular part of my house, how are they going to know what to do if they're not seeing it?’ And I think for the mortgage, there's going to be some parts that borrowers have heightened expectations on in terms of virtual and fast and speed, and then others where you still want to talk to a person, which has always been that theme of high tech, high touch, so it's an interesting dynamic that I think will still be there throughout all of this.”

Shane then asked if COVID has impacted the back office operations of any of the panelists. 

Brian noted that for Reggora, “on one hand, you have this insane need to improve technology and improve the current stacks, and then you also have insane volume to deal with today...  So as a technology vendor, it's been interesting that the actual implementation process is infinitely more important to make it more streamlined and easier to use to improve adoption, because you can't afford to screw things up right now,” which has made streamlined implementation a huge priority for Reggora. 

Joe Purthur, President of Mortgage Coach, added, “the most important thing that we see that defines our good implementations from the great implementations is the attitude from senior leadership.” He explained, “if the top understands the benefit and they evangelize the why behind the company's investment, you will always get rapid adoption.” 

Brian and Joe underscore two of the most important factors when implementing a new technology. If a vendor’s implementation process becomes tedious and difficult, or moves forward without steadfast support from leadership, the results are sure to be seen in adoption rates and throughout the life of the partnership. New customer implementations with Reggora  are handled by a dedicated team, making the implementation and onboarding process a smooth lightweight lift from the lender perspective.

Tango for Success 

Next, the panelists discussed what it takes to achieve success in today’s unique environment. 

Joe explained, “I think right now, when you focus on the future and you talk about success stories, lenders that automate and lenders that put the borrower first are the lenders that are going to be successful a decade from now. And what's inevitable is the lenders that plan and implement in the next 24 months are going to be the leaders in eight to ten years.”

Brian agreed, adding, “from the technology vendor standpoint, when you're doing this stuff, it's way easier to just listen to a lender and be like, ‘all right fine, we'll do that. We'll build it this way. We'll customize this thing for you.’ And over time you're building one-off things here and there, and your product ends up not being super great. And so the products that are super focused on their own mission are usually the ones that end up on top. So it's kind of like it takes two to tango in that regard… Appraisal is one of those things where it is very quantifiable, but it does require the actual tech vendor as well to have some courage there and be able to come forward with, ‘this is what works better, here's why, and this is what it looks like.’” 

When you work with as many lenders as Reggora does, a picture of the workflows and systems that can save the most time or eliminate the most manual processes becomes increasingly clear. The hardest part is often decoupling lenders from comfortable yet inefficient workflows, and getting them to “tango.” For lenders who decide to embrace changes, this tango comes naturally, but those who are reluctant to change will lag behind. 

Long-Lasting Changes and a Digital Future

Shane then pointed out that “obviously we've had so many changes over the last year or so,” and asked, “will that pace continue? Will anything go back to normal?”

Brian answered, “I think that it's definitely undeniable that the changes are going to be lasting on a lot of fronts” due to the clear and sustained impact of the pandemic. “Whether it's the regulatory stuff that we talked about, with remote online notarization, or appraisal, obviously the technology is going to have to keep up with the changing, but also the tactics from a behavioral standpoint I think are also going to have to change and improve with the lay of the land as consumers change their behaviors.”

Finally, Shane inquired of Brian, “what are you hearing from the younger generation as it refers to home ownership and what made you decide to build a platform for the appraisal side?”

Brian disclosed, “appraisal is one of those things that really had not changed for a long, long time. And we’ve talked about all this stuff about digital mortgage, but if there's just even one part of that process that delays everything, then you're not going to get to that pie in the sky one-day close, one-day mortgage, or two-day mortgage. So we took on what we think is probably one of the hardest parts of that process, because you're dealing with physical humans going to physical places, and thought that we could really do our part in bringing forward the digital mortgage,” because “the continued expectation for younger folks will be digital and easy and convenient.”

Thank you to the whole team at SimpleNexus for putting on such an outstanding event.

To learn how Reggora can streamline your appraisal process and save your team time, click here to schedule a private demo.