I am about to say something in 2022 that no one in software design and process management would say. Do loan officers need more technology than they currently have? Will new technology change anything?
Let that sit a second. After all, my friends probably assume I hit my head and need to reconsider my job choices. However, I am going somewhere with this.
Most loan officers do not believe they need more tech than they have now. The absolute truth is they don’t use much now at all and not because business is slow. Right now, they have 99.99% of what they need to do their jobs. Some loan officers can take a paper application, hand type it into a system, like Encompass, upload docs manually, and the file is ready.
They can access pricing and credit via a portal or website, and they are done. That process is one that has been the same for 25 years. They sell our product, build trust, offer rates and terms, get “buy in” and commitment from a borrower and pass to operations. That process doesn’t need more than what they have.
All mortgage companies have some software package that does the above, and it all worked during the the refi boom. Everyone has been getting paid, so why change it? It isn’t broke.
Nothing we have is broken
They do not need more technology. Nothing we have is broken. The tech we have that isn’t used isn’t about training or talent but the parts that are optional are not used.
An example is that, although there are self-checkouts in every store, the line to have the employee check you out is still the longest. Self-checkout is faster, easier, and there are 10 open registers instead of two. In the end, you’ll have the same bags in your trunk and pay the same amount for the same items as the self-checkout guy.
I called a friend over at Bank of America to talk about this. We discussed the GPS or Global Processing System they used to have at the bank. Function keys in a DOS-based green world was how all loans were done in 2010.
Billions of dollars in closed loans went through this system. It worked, in theory. If your cash out was off by $10, you had to click through every field in about 25 screens to get to the loan balance to change it, then another 10 screens to get to the submit button. Then, you could see if it was right. It worked like a charm. I am pretty sure I worked one afternoon for three hours doing this to get a $1.02 overage to be $0. I also wrote a script that clicked through the first 25 screens, then a second to handle the last 10.
Being a loan office hasn’t changed
Being a loan officer (LO) hasn’t changed. We’ve added some things in recent years that make the customer experience better, such as online applications, smartphone alerts, fast and easy document uploads, access to bank statements without uploads and digital disclosures. Loan officers have had applications pop up in their system complete with credit and docs before they say one word to a borrower. This makes it easier and faster for everyone.
I think there is a fear that if we cut any more of the process, we won’t need the LO at all. But, remember this: People still stand in the grocery line to have their items scanned rather than use the self-checkout. There is a place for the personal touch.
Don’t fear the process
The LO is first inch in a yardstick. The process of mortgage loans requires technology that helps processors, underwriters, closers, funders, insurers, secondary, and more. Tech increases on the LO side may have huge time lifts for the other parties and increase the customer experience, but have no impact on how the loan is booked at all.
The flip of this is that we come up with amazing technology to close a loan but the title company refuses to use it. Does that impact the LO? Does it impact the loan? No. Is it something we’d like more people to use? Yes. Would it enhance a borrower’s experience? Definitely.
So, my question was, does the LO need more technology than they have now? I am not and have not been a loan officer for many years. I know we will not get everyone to change, and I know there are borrowers out there who we win by staying the same. The next question is not do we ‘need’ the change but do we ‘want’ the change and, then, will change help?
BJ Witkopf is a mortgage specialist with Assurance Financial.
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