From automation to AI, today’s mortgage lending technology is advancing at a rapid pace. As a result, there are more tech-savvy solutions out there than ever before. Some of these solutions can streamline your costs, supercharge your efficiencies, and support a better borrower experience.
While the mortgage lending tech landscape is ripe with innovation, selecting the right suite of solutions can be overwhelming. That’s where Certified Credit’s Senior Vice President of Product Development, Ron Carlson, can help. With over three decades of industry experience, Ron has a deep understanding of how technology can improve lenders’ workflows. Better yet, he has a seasoned discernment for identifying the ideal tools for lenders’ unique needs.
In this latest installment of our Executive Fireside Chats series, we interview Ron about his recommendations for mortgage lenders looking to optimize their use of technology in today’s market.
Getting to Know Ron Carlson, Certified Credit’s Senior VP of Product Development
Before joining Certified Credit in 2021, Ron Carlson had a vast and varied career in the mortgage industry. He started out as a loan processor 33 years ago. Since then, he’s worked in customer service, technical support, operations, and product development.
Before embarking on his distinguished career, Ron earned his degree from Colorado State University. Today, he’s happily based in the Denver Metropolitan Area.
How to Harness Technology For Strategic Growth and Enduring Success
How Can Technology Be Used to Improve Customer Service and Borrower Retention?
“If lenders want lasting success, customer service needs to be their top priority. Ample data shows that it’s more cost-effective to pursue repeat deals with existing borrowers than to constantly hunt for new ones. The key to boosting borrower retention is reaching out at the right times.”
“Credit monitoring solutions, like Cascade Alerts, can notify you when your past and present borrowers are shopping for new loan products. Rather than spending unnecessary time and money staying in constant contact, this tool allows you to time your interactions with past borrowers when they’ll be most receptive.” Here’s how Cascade Alerts works:
- You upload your database of past and present borrowers.
- Cascade Alerts will monitor their credit reports continuously.
- If it uncovers any mortgage-related inquiries, you’ll be alerted within 24 hours.
- You can receive these alerts via SMS/text, email, or LOS notification.
- Upon receiving an alert, you can contact your leads and try to secure their repeat business.
“Cascade Alerts ensures that you never leave a potential deal on the table. By supporting a better borrower experience, it can also set you up to receive more referrals. Additionally, Cascade Alerts can help you identify borrowers who exhibit early payoff risks and touch base with them before they refinance.” The best part? This set-it-and-forget-it solution is incredibly cost-effective, enabling you to reap its benefits without investing a lot of time or money.
Learn More: Overcoming the Challenges of Low Borrower Retention in the Mortgage Industry
What are Some Strategies Lenders Can Implement to Leverage Technology and Reduce Their Overall Cost of Doing Business?
“The cost of loan manufacturing has been steadily increasing over the past few years. And while some tech solutions require an upfront investment, many can streamline your origination expenses considerably over time.”
If you want to leverage technology to cut costs, Ron recommends looking for tools that help you do the following:
Monitor Your Applicants’ Credit Activity Throughout the Loan Process
“After getting approved for a mortgage, a notable number of applicants will take out an auto loan or purchase furniture on credit. Unfortunately, these changes to their credit activity can make them ineligible for their mortgage loans. We’ve seen countless lenders face expensive loan fallout and repurchase requests due to these last-minute revelations.”
Standard refresh reports don’t give lenders enough time to resolve issues before they have such dire consequences. That’s why Certified Credit developed a better solution: Cascade Undisclosed Debt Monitoring. “This credit monitoring tool scans your applicants’ credit activity for potential issues that may put their eligibility at risk. You’ll be notified of these issues right away, giving you time to get your applicant back on track before their closing date.”
Purchase Data at Strategic Times
From credit reports to income and employment verifications, third-party data can be expensive. And while you may need this data to complete the loan origination process, you don’t need to order it for every applicant. Instead, Ron recommends taking a “just-in-time” approach to ordering data.
“You can streamline your origination costs by timing your orders strategically. We have several tools at Certified Credit that can ensure certain eligibility criteria are met before you invest extra money.” Two of these tools include:
- Smart Select – “Credit reporting costs have increased substantially over the past two years. To keep costs low, lenders should only purchase tri-merge credit reports when they’re truly needed. Smart Select is a solution we designed to help our clients evaluate their applicants’ creditworthiness more affordably.” Smart Select automatically orders credit reports from one bureau at a time, according to your custom parameters. Before upgrading your orders, it compares applicants’ credit data to your pre-set credit thresholds, ensuring you only pay for additional reports for applicants who are most likely to qualify. “By leveraging Smart Select during prequalification and formal applications, you can take non-qualifying applicants out of the running as cost-effectively as possible.”
- Cascade VOE – Another substantial cost in the loan origination process is verifications of income and employment. Ordering these reports too early or using high-cost vendors regularly can quickly inflate your expenses. “Cascade VOE can minimize your verification expenses in several ways. First, you can pair Cascade VOE with our milestone ordering solution to automatically initiate orders at the ideal time in your lending workflow. If you need help determining this ideal time, our team can conduct an analysis on your behalf.”“Cascade VOE also lets you set up a custom cascade of various vendors, ranging from instant-hit providers to affordable consumer-permission vendors. You can customize the order of these vendors to suit your goals. We’ve seen many clients minimize their VOE costs simply by placing low-cost vendors first in their cascade.”
Learn More: 6 Benefits of Integrating Consumer Permission VOE into Your Cascade VOE Flow
How Can Lenders Measure ROI When Implementing New Technology Solutions?
“After implementing a new technology, I always recommend tracking your pull-through rate. This metric offers a high-level view of your workflow efficiency, customer service, and competitive edge.” You can calculate this rate by dividing your number of funded loans by the number of submitted applications over the same period.
According to an ICE Mortgage Technology report, the average pull-through rate for the mortgage industry is around 20%. You can raise your pull-through rate with the right technology.
Here’s what Ron recommends: “If you want to close more loans, don’t dismiss your non-qualifying applicants. Instead, help them find a clear path toward improved creditworthiness.” At Certified Credit, we have two tools that can facilitate this process:
- Cascade Prequal – Cascade Prequal can evaluate your applicants’ creditworthiness automatically without initiating trigger leads or dinging their credit scores.
- Credit Score Improvement Tools – Our credit score improvement tools can identify the most efficient ways to boost applicants’ scores so they can get on track to become mortgage-ready as soon as possible.
“After sharing a personalized plan of action with your on-the-cusp applicants, make sure to stay in touch with them and check in on their progress. By doing so, you’ll increase the chances that they’ll return to you when they’re ready to buy.”
In addition to these innovative tools, employing automation wherever possible can optimize how you and your team allocate your time. “When you let technology handle repetitive tasks, you free up your time to concentrate on your most complex loans and extract the most value from your loan officers’ expertise.”
What Technology Solutions Are Out There To Help Lenders Increase Their Revenue and Market Share?
“At Certified Credit, we design all of our solutions to support stronger revenues. Our Cascade line, in particular, can help your business run more efficiently, making it more profitable and appealing to new applicants.”
“When evaluating a new client’s workflows, we consider what technology would be most complementary to their current processes.” “This way, they can leverage innovative technology without having to redo their existing systems.”
Can You Share Some Examples of How Certified Credit’s Technology Solutions Have Helped Lenders Achieve These Goals?
“We design many of our revenue-boosting solutions to integrate with leading LOS systems.”
Here are just a few examples:
- Cascade Alerts – Cascade Alerts can bolster your revenues right away by highlighting opportunities for repeat business. “On average, our clients see 2% of their past and present client portfolio come back into the fold after implementing Cascade Alerts. The resulting revenue gains can be quite significant.”
- Cascade VOE – As we mentioned earlier, Cascade VOE can lower your verification costs by helping you leverage low-cost vendors more often. “Cascade VOE users typically see an immediate savings of 15% to 25%. This tool also helps them pass their reduced VOE costs onto their borrowers by generating TRID-compliant, itemized invoices.”
- Cascade UDM – “The most recent Federal Reserve data shows that credit card debt has risen to $1.13 trillion. Since consumer debt is breaking records right now, lenders need to take a proactive approach to their applicants’ undisclosed debt. It’s one of the best ways to boost their rate of successful loan closures.”
Learn More: 8 Ways to Take Control of Your Bottom Line
Stay Tuned For More Exclusive Industry Insights From Certified Credit Executives
As you can see, mortgage technology can optimize many areas of your business. By following Ron’s advice, you can tailor your tech infrastructure to support your goals and remain competitive amidst ever-evolving market conditions.
For more personalized guidance, schedule a credit consultation with the Certified Credit team. During your consultation, we can showcase demonstrations of our tech solutions and pinpoint the ones that will have the greatest impact on your goals.
Along with the tech tools discussed above, we also offer:
- Affordable credit reports
- Fraud and risk support
- Flood zone determinations
- Property and valuation tools
- Underwriting compliance
- Settlement service
Want more industry insights from our executive team? Check out our last Executive Fireside Chat with Paul Robinson, Certified Credit’s Vice President of Sales, and stay tuned for future installments.
