Fixing the Mortgage Loan Origination Process Flow
By: Daniel Sogorka
November 6, 2019
By:Daniel Sogorka
November 6, 2019

Fixing the Mortgage Loan Origination Process Flow

At Digital Mortgage 2019, Cloudvirga Chief Product Officer Tim Von Kaenel and I sat down with Danielle Fugazy of National Mortgage News to discuss the current state of the mortgage loan origination process flow. She raised a lot of important questions about what that flow currently looks like for the two parties most affected by it: Consumers and Originators.

Here, I go into more detail about the topics we covered.

What’s Missing from the Customer Experience of the Digital Mortgage?

The mortgage loan origination process flow begins when a borrower fills out an application. These days, those applications are almost always digital, but the rest of the borrowing experience may not be.

If it is, it’s usually not part of an end-to-end system that seamlessly connects that first application with the rest of the process. We’re in a place now where there’s more mortgage technology than ever on the market, but most of it addresses only one part of the origination workflow, so the borrower experience is fragmented.

Borrowers may have to log in to one system to complete an initial application, a different system when it’s time to upload documents, and yet another system when it’s time to eSign documents. This isn’t ideal for several reasons:

  1. It’s inefficient.
  2. It’s cumbersome and confusing, requiring borrowers to remember several usernames and passwords.
  3. It provides borrowers too many opportunities to fall out of the origination process flow, as they navigate from one system to another and have to root around for the relevant information.

For lenders, this means fewer completed mortgage loan applications and longer processing times for those that are completed – not to mention the high costs of maintaining so many individual pieces of software.

For borrowers, it means the process is frustrating – often unexpectedly so. After completing an initial application that’s streamlined and digital, borrowers may be unpleasantly surprised by how clunky the rest of the origination process is.

But borrowers aren’t the only ones whose experience of the mortgage loan origination process flow leaves something to be desired: Loan Advisors are also experiencing less-than-optimal conditions.

What’s Missing for Loan Advisors?

In addition to asking what’s missing from the customer experience of the digital mortgage, it’s important to investigate what’s missing for Loan Advisors. Danielle actually asked us a slightly different question during our conversation. She asked why it’s so hard for Originators to adapt to all this new technology.

But the reality is not that Originators lack the ability to adapt to new tech. The problem, in most cases, lies with the fragmented systems they’re being asked to operate in. 

In a normal day, a Loan Officer has to log in to multiple systems to interact with a borrower or processor. They have to toggle between these systems to do their jobs, all while trying to maintain a pleasant experience for the customer.

What’s more, many of the tools Loan Advisors have access to are, frankly, antiquated. Even the idea that Loan Officers should have to juggle a handful of tools as part of the mortgage loan origination process flow is antiquated.

Something’s got to give.

What’s Next?

The good news is that we’re in a golden age of fintech. The sea change in our relationship to technology paved the way for applications we couldn’t have imagined a decade and a half ago. Innovators are identifying problems and developing technology to solve them at an unprecedented rate.

As it relates to mortgage technology, most of that innovation has so far happened in relative isolation: entrepreneurs solve for one specific component of the mortgage origination process flow. And while those innovations – things like secure document vaults and eSign technology – have brought us closer to a digital mortgage, they lack big-picture perspective.

What we need now is a solution that solves the problem of technology fragmentation – a platform that truly enables end-to-end digital mortgage origination. This isn’t a pipe dream. In fact, we’re seeing more and more tech companies merging and partnering to offer streamlined, best-in-class solutions. 

At companies like Cloudvirga, we’re seeing startups approach innovation with a focus on the big picture, aligning expertise from the mortgage industry, the tech industry, and compliance to create solutions that work for the ways Loan Advisors do their jobs.

The mortgage origination process is in a period of transition. We’re moving toward a place where dominant technology will enable a seamless, end-to-end flow. When we get there, loan origination will be more welcoming for borrowers, more rewarding for Originators, more profitable for lenders, and more enjoyable for everyone involved.

Read more about what the new workflow might look like when we get there.

Full Video Transcript

00:10 Danielle Fugazy: Hi, I’m Danielle Fugazy coming to you from Digital Mortgage, I’m joined by Dan Sogorka and Tim Von Kaenal from Cloudvirga. Welcome. 

00:19 Tim Von Kaenal: Thank you.

00:19 Dan Sogorka: Hello.

00:20 DF: Tim what’s missing from the consumer digital mortgage experience today. 

00:24 TK: We see typically three things that are lacking from the current experiences today for consumers. One is, there’s really not an end-to-end experience that the borrower or can stay in through the entire life cycle of the loan. A lot of lenders may have a digital app experience where they can take an app, but then there’s no place for the borrower to go when it comes time to upload documents or e-sign documents to do some of the other aspects of a loan. The other thing we see is really different experiences, not a common experience. So it’s very likely that you may log into one site to be able to fill out your application, but then you go to another site, another email, that takes you to a different location to e-sign your documents. Typically you’re having to send documents back and forth to your loan officer. So really, a lack of an end-to-end experience and to end platform that borrowers can stay in through entire life of a loan.

01:13 DF: What’s missing from the loan originator digital mortgage experience today?

01:17 DS: Yeah, for the LO it’s actually worse than for the consumer. Typically the LO is in multiple systems, they have to learn an LOS which wasn’t really designed for them. A lot of lenders create wrap systems that then either maybe talk to the LOS but typically don’t. So you’re having to go log in to multiple systems that don’t have kind of one end-to-end experience, don’t integrate with the consumer experience, when really the LO should be out in the field, working with customers, engaging with borrowers, helping them get the best loan for them, versus trying to figure out multiple technology platforms.

01:55 DF: Makes sense. So why is it so hard for the LOs to adopt new processes?

02:01 TK: Well in reality, a lot of the challenge is really the technology, the tools that loan officers have today in many cases are fairly antiquated. They’ve been around for 10, 20-30 years. A lot of the experience that loan officers go through is multiple different systems that they have to log into to be able to interact with the borrower or interact with the processor, so it’s really less about the loan officers lack of ability to adapt. It’s really more of the technology challenges that are in front of them, which is really where an end to end platform and a single experience really helps solve that problem.

02:32 DF: So, last question here Dan, will these separate systems for loan processes, customer acquisition, engagement, retention, what’s gonna happen in the future? Will these things be able to merge or will they stay separate systems?

02:47 DS: Yeah, a good question, and I think we’re at an interesting point in time when if you look back, the last 20 or 30 years there were essentially two platforms, you had an origination platform, and a servicing platform right? Now with this burst of technology and the whole kind of FinTech movement you have a lot of platforms that are out there that address different components of the process. But what you end up now with is kind of a Frankenstein of seven different platforms that don’t speak to each other that people are trying to work through and provide a common seamless experience. So I think they will definitely converge. I think you’ll see kind of best in class technologies forming strong partnerships, ultimately for the benefit of the consumer and the loan originator.

03:29 DF: Makes good sense. Tim, Dan, thank you so much for joining me today at Digital Mortgage. 

03:34 DS: Thanks Danielle.

03:34 TK: Thank you very much.

Watch 2 Minute Guided Demo Tour

Want to reduce closing costs and close more loans faster? Watch a 2 minute guided demo tour and see why the top U.S. lenders trust Cloudvirga as their digital mortgage technology provider.

Recommended Blogs

The Future Lending Office is a Coffee Shop

The Future Lending Office is a Coffee Shop

By: Kyle KamroozNovember 8, 2019By:Kyle KamroozNovember 8, 2019I’ve written in the past about what it will take to bring mortgage lending into the digital age (hint: digitize the back end) and about the necessity of bringing down the cost of mortgage lending. Today, I...

read more
Compliance as a Competitive Advantage

Compliance as a Competitive Advantage

By: Maria MoskverNovember 7, 2019By:Maria MoskverNovember 7, 2019Before Dodd-Frank, it was far too common for mortgage companies to fall outside the guidelines  set for compliance. Everyone’s expectations were different, in part because there was far less oversight....

read more