Tech Tune-Up for Mortgage Lenders: 3 Ways to Optimize Performance in a Tight Market

July 8, 2022

Refi applications are all but gone. Purchase applications are hampered by limited housing stock and climbing interest rates. Inflation is pinching everyone. For mortgage lenders, improving efficiency will be crucial to maintaining margins in this market cycle.

To that end, many are reviewing their technology with an eye toward performance optimization: how can lenders make sure their tech is delivering the most value possible? And just as importantly: who’s going to do this tech tune-up when engineers are more expensive than ever, in short supply, and not particularly interested in working at non-tech companies?

In this post, I’ll address both.

Tech Tune-up 1: Automation

It shouldn’t surprise anyone that automation helps lenders operate more efficiently and makes it easier to scale. The problems for most lenders are:

  1. Deciding what to automate for the biggest impact
  2. Convincing their employees to rely on the new tech

Let’s take a look at both. 

As for what to automate, generally speaking, any task that requires rote, repeatable work can be automated. In mortgage lending, disclosures are a great candidate. Lenders can set up systems to automate disclosures and redisclosures that both save their employees a lot of time and prevent noncompliance consequences.

Moving through the process, conditions management can be automated, as can decisioning. And so on.

Of course, automated systems can’t handle exceptions and edge cases. That’s fine. They can be set up to hand off those cases to people who apply their nuanced understanding where it can have the biggest impact.

The second problem – adoption – is trickier. There are entire books written on getting teams to adopt new technology, but in essence adoption happens when employees are brought into the process of choosing new tech, rewarded for using it, and provided with adequate training.

Stay tuned to this blog for more industry-specific insight on that front. In the meantime, this Harvard Business Review piece has some helpful insight.

Tune-up 2: Streamlining

Automation can make your processes more efficient and your operations more scalable, but only when it takes your end-to-end processes into account. 

This is a lesson many lenders have learned the hard way in the last decade as they’ve adopted tech solution after tech solution to improve efficiency and lower costs – without seeing much improvement on either front.

This is where streamlining comes into play.

Today, many mortgage lenders have tech stacks that consist of dozens of point solutions that “streamline” one part of the mortgage process. But when it comes time to, for example, update your LOS, all these tech solutions slow the organization down, because a change to one piece requires time-consuming changes to everything.

Streamlining can help. The process involves considering your tech stack holistically and identifying opportunities to eliminate things (e.g., when multiple solutions perform the same function), replace multiple pieces with a single piece, and connect pieces differently.

After streamlining, lenders typically…

  • Enjoy efficiency improvements.
  • Have fewer vendor relationships to manage.
  • Are able to deploy upgrades and new products faster.

Tune-up 3: Data Enhancement

Mortgage lenders have access to a considerable amount of data. Tapping into it can yield new revenue streams and reduce customer churn.

Read more about the revenue opportunities hiding in mortgage lenders’ data.

Of course, accessing data and making it usable requires technical expertise and a strategy.

In fact, all of these tune-ups do. That’s a problem in the current labor market.

Overcoming the IT Talent Shortage

We’re in a global IT talent shortage. Last year, Gartner found that a lack of IT talent was the leading reason companies aren’t adopting new technologies.

It’s no wonder, then, that salaries for IT professionals are sky high. And even if mortgage lenders can afford them, many IT professionals are more interested in working for a tech company than a lender.

But there’s no way around the reality that tech improvements are essential for lenders that want to survive the current market. In fact, the industry’s leaders have made it clear that doubling down on their tech investments is how they plan to power through the down market (and possible recession) and come out stronger.

The solution: partner with a consultant who knows the mortgage industry as well as they know technology. That partner can assess your current state and help you seize the opportunities that will position you to outperform your competitors.

Partner with a Knowledgeable Consultant to Optimize Your Tech Stack

NTERSOL’s team has been building industry-leading mortgage technology solutions for more than a decade.

Our combination of industry and technical expertise is unrivaled. We excel at helping lenders and others in the mortgage space develop technology and data solutions that position them for growth in any market environment.

Interested in finding out where your biggest opportunities lie? Get in touch. We’d love to hear about your operations and see if we might be able to help.