Evidence that Mobile is a Winning Strategy
by Alok Bansal
Rocket Mortgage blasted into our world during 2016’s Super Bowl 50, a contest between the Broncos and the Panthers. At its peak, the game attracted more than 115 million viewers, and right in the middle of it all Quicken Loans debuted their spot for Rocket Mortgage. It changed everything.
Most industry players realize that Rocket Mortgage’s process is not all-electronic and certainly not all mobile. The company still takes full applications through a call center and uses humans to drive much of the loan manufacturing and closing process. But none of that matters, because to the consumer, Rocket offers an online mortgage experience and that is what they crave.
How do we know? Just look at how the company has done since the big game. In the first three quarters of 2016, Rocket Mortgage funded just over $5 billion in loan volume. Very respectable and putting it among the top 30 mortgage lenders in the country, ranked by volume.
By February of this year, Forbes reported that Rocket Mortgage had overtaken Wells Fargo as the largest mortgage lender in America. According to the publication, “In the fourth quarter of 2017, Detroit-based Quicken made $25 billion worth of mortgages, overtaking Wells Fargo as the largest of the nation’s 30,000 home lenders, with a roughly 6% market share.”
There’s a reason these lenders are winning. In a paper entitled, “The Role of Technology in Mortgage Lending,” the Federal Reserve Bank of New York concluded that fintech lenders like Rocket process mortgage applications 20 percent faster than traditional lenders .They can do this because they are capturing borrowers online via mobile technologies and then moving them smoothly into the call center to complete the loan application.
These lenders as a group had increased their market share, according to the bank, from 2 percent in 2010 to 8 percent in 2016. That’s on the mortgage side. For consumer loans, a gateway product for mortgages, TransUnion estimates that fintech lenders now control closer to 30 percent of the market. It’s just a matter of time before they translate these new borrower relationships into more complex financial products, like mortgages.
The technology lenders need today to compete for this business
Traditional lenders need not become fintech lenders in order to compete with this new class of competitor. They do, however, have a driving need to continue to be found where the modern borrower is looking for home financing. For all of the reasons stated above those borrowers are now mobile. There can be no better proof than the incredible rise of Rocket Mortgage.
So, what technology would be required for a traditional lender to duplicate the success of fintech firms? A digital suite of mortgage services that can seamlessly connect the home loan borrower with the company through any online channel they choose to use.
This includes mobile apps, of course, but that’s just the beginning. The suite should also include a borrower portal that will connect the borrower (and the real estate salesperson, title company, attorney and others) to the company seamlessly. This might also include certain help desk functionality and will certainly maintain detailed audit trails for compliance and reporting. Analytics should be built in and provide detailed, fully customizable reports and dashboards.
Mobile document imaging is a must. Borrowers should have the ability to scan and upload documents through the mobile app. The ability to quickly offer the borrower a pre-qualification is required. This involves taking a full application and then checking provided information against guidelines.
While not every mobile mortgage lending application makes it possible to take a full application online, the best do and make it easy for the lender to capture basic borrower and property information through the app.
Finally, borrower communication should be enabled through an omni-channel interface, making it easy to stay in touch with the borrower in the manner they wish. It also makes it easy for the lender to capture additional documentation as required and to provide the borrower and others with loan status information.
Forbes Welcome. (2018). Forbes.com.
Ojha, R. (2018). The Future of Lending Can be Found in Fintech. theMReport.com.
 TransUnion (2017) “TransUnion Study on FinTech Market.”