How Lenders Can Build the Tech They Need to Achieve Digital Transformation

May 05, 2022

In my prior post, I made the case that mortgage lenders who want to survive and thrive through this market cycle need to embrace digital transformation.

That can be a hard sell at a time of increasing interest rates and tightening margins. But those shrinking returns are exactly why it’s high time to invest in tech today. 

Just look at the biggest players in the space: after announcing a 90.5 percent dip in profit in Q4, loanDepot CEO Anthony Hsieh explicitly said that the company is doubling down on tech investments.

The key question, then, is not whether mortgage lenders need to focus on tech right now. It’s how to build the tech they need during a historic labor shortage.

Background: The Most Impactful Tech Upgrades for Mortgage Lenders

As I wrote before, lenders tend to see the biggest benefits in digitizing four key areas: 

  • Online self-serve applications
  • Call center Automation & Intelligent lead routing
  • Document management
  • CRM systems
  • Consumer/Enterprise Digital Experiences

But off-the-shelf solutions don’t offer the functionality mortgage lenders need. To really enable loan officers to do more, faster, lenders need custom solutions. Which means they need developers who can build those custom solutions.

The problem: hiring developers is hard for mortgage firms in the best of times – and almost impossible in today’s labor market.

Why It’s So Hard for Mortgage Companies to Hire Developers

Long before the Great Resignation, there was talk in the US of a STEM skills shortage. Developers have been in high demand for a while.

Because of that, they command high salaries and often have their pick of jobs. And many of them choose to work in – well, sexier industries than mortgage lending.

Even those more appealing employers are struggling to fill open roles. I just did a quick Google search and found, on my first click, a developer job at Apple that’s been open since June of last year (see Figure 1). The company site has more than 600 open positions in its “Apps and Frameworks” category.

Figure 1: Apple developer job posted in June 2021 (source)

If Apple’s having a hard time finding talent, everyone is.

In fact, a recent LinkedIn survey found that the median time to hire an engineer is 49 days. That’s just shy of two months – and half of engineering roles take longer to fill.

But hiring someone is just the start of the process for mortgage lenders: if the person doesn’t have any mortgage industry experience, you’ll need to train them on the industry-specific regulations and requirements your software will have to adhere to. Only when they have that under their belts are they ready to start building your software.

So we’re talking close to five months on the short end from posting a job to having a developer who’s ready to start building the custom tech you need.

Then they actually have to build, test, deploy, and iterate on the tech. That could take another several months. The outcome is that your firm won’t start enjoying any of the benefits of having more efficient processes for at least a year.

For most lenders, that’s too long to wait. What’s more, there’s no guarantee that the solutions your new developers build will actually work.

Partnering with an Experienced Provider for Better Solutions, Faster

Most people don’t get things right the first time.

That’s why experienced IT professionals are in such high demand – companies of all sizes, in all industries, need things that work, right now.

It’s also why an experienced IT professional might not succeed on the first product they build for the mortgage industry. It takes time to learn the ins and outs of any field.

But, again, mortgage lenders looking to decrease their costs per loan (up to $9,140 according to the latest MBA data) ASAP can’t afford to wait for a new hire to learn the ropes.

That’s why I’m such a big believer in what we offer at NTERSOL.

Because our team has been building digital solutions for the mortgage industry for decades, we understand not only the regulatory hurdles mortgage tech must clear (looking at you, three-percent abandon rate) but also which features actually add value – and how to build them fast.

Our solution accelerator approach ensures that the best practices we’ve developed over the years make it into every solution we build – and that we build those solutions and get them operational for our clients faster than is normally possible.

Power through the Downturn with Custom Solutions

Interested in hearing more about how our team can build you the tech you need to streamline your operations, lower your cost per loan, and come out of the market downturn stronger than ever? Get in touch. I’d love to walk you through how our custom solutions transform operations for our mortgage clients.