DS News

37 THE LEADER IN DEFAULT SERVICING NEWS Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com. THEFIVESTARINSTITUTE "From a borrower's perspective, the pandemic has accelerated the demand for a consistent, digital first borrowing experience," Tyrrell said. "Signing documents electronically is quickly becoming the minimum, and borrowers expect a seamless experience from start to finish. In 2020, many lenders cobbled together different solutions to meet borrower demands, but that often led to a more confusing, fragmented process. COVID-19 highlighted the need for a single consistent digital experience for borrowers." e report found that homeowners who used an online application appreciated the simpler application process (55%), reduced time to close (53%), and resulted in fewer in-person interactions (49%). Not surprisingly, decreased in-person interactions grew in importance in 2020, as just 37% of consumers in 2018 cited 'no need to meet in person' as something they liked about their online application process. Whether they had been through the mortgage loan process or not, 64% of consumers surveyed believe that an online mortgage process would make buying a home or refinancing easier than an in-person process. e adoption of more digital tools caused lenders to pivot and develop new solutions to meet this growing need for a more "hands-off " process. "Due to the large scale of volume happening and an increase in consumer demand and expectations, a number of lenders in 2020 had to piece together different electronic closing solutions to keep up," said Nancy Alley, VP of Product Strategy, ICE Mortgage Technology. "e survey results completely align with the growing need for one consistent and seamless automated platform that connects borrowers to lenders all the way to e-signing and saves lenders time and money along the way." Currently, online applications and online portals are the digital tools most offered among lenders, with more than nine in 10 offering both options to borrowers (91%), respectively. Of lenders who offer online applications, 60% said more than half of all loan applications are submitted online, while 38% said more than 80% of their applications were completed online in 2020. However, traditional loan application methods may be more common at larger organizations. Half of large institutional lenders, or those with 200 or more employees, indicated that less than 50% of their loan applications were submitted online. In addition to satisfying borrowers, ICE found that technology played a major role in the time to close all loans in Q1, from 58 days in January to 52 days in March. e time to close all purchase loans decreased over the quarter, from 57 days in January, to 53 days in February, and down to 51 days in March. A recent Zillow survey found that most millennials (59%) said they would be at least somewhat confident making an offer on a home they toured virtually, while 39% would be comfortable buying a home online. e same survey found that more want digital tools available during the home shopping process. "It's clear that strong demand from the next generation of buyers will keep real estate technology in place long after the pandemic is over," Zillow SVP of Product Matt Daimler said. "Digital tools rapidly adopted during the pandemic not only make home shopping safer, they make it faster and easier." Additional findings by the ICE Borrower and Lender Insights Survey included: » Nearly nine in 10 lenders (86%) said borrowers should spend less than 30 minutes filling out a loan application, but 68% of borrowers said they spent 30 minutes or more completing their application. » Most lenders (72%) felt borrowers were satisfied with the amount of communication from them. More than half of lenders (74.8%) said they contacted borrowers at least once per week to update them on the status of their loan after the application was filed. » If they were to apply for a new mortgage within the next year, borrowers would most appreciate interacting with their lender through an equal blend of traditional and digital methods (26%), closely followed by interactions that have a more traditional focus (e.g., telephone) (25%), and purely traditional interactions (e.g., in-person) (24%). » Homeowners who used an online application appreciated the simpler application process (55%), reduced time to close (53%), and fewer in-person interactions (49%)–a significant rise due to the pandemic. In 2018, only 37% of consumers cited 'No need to meet in person' as something they liked about their online application process.

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