Mobile apps for the mortgage lending process
By Howard Schneider
Seeing customers using cell phones to stay connected with important parts of their lives has mortgage lenders wondering whether mobile applications should be part of their lending process.
Some mobile apps now exist that let bank customers follow their mortgage applications through the approval process, then later track their loan balance and calculate what their new payment would be if they were to refinance. Smartphones are also being used to quickly transmit the information on a paystub to lenders.
Yet mortgage origination software firms caution banks not to become overly optimistic about the potential of mortgage apps. “‘I want to take an application on it’ is the first reaction to new technology,” acknowledges Craig Bechtle, chief operating officer at MortgageFlex Systems Inc., a mortgage origination and servicing software provider in Jacksonville, Fla.
His advice to community bankers: Focus on “using a device for what it’s good for.” Most borrowers aren’t interested in downloading an app that they’ll only likely use while they’re waiting for loan approval, Bechtel says. Your customers may be perfectly content to find mortgage information and updates on your bank’s website, especially if they already visit it regularly for Internet banking transactions, he adds. Offering a mortgage website app can reinforce your community bank’s online marketing while gaining more useage by consumers than a stand-alone phone app would. Loan status reports also can be sent automatically, with consumers selecting whether they prefer to receive an email or text message, explains Lester Dominick, president of MortgageFlex Systems.
Another option is to have your mortgage software email updates to loan officers—and then have them personally contact borrowers. “You don’t need to do everything online,” says Bechtle. Mortgage software experts agree that lenders can’t expect borrowers to fill out a loan application on their smartphone. “Phones are not good devices for data entry,” Dominick explains.
However, some loan officers, particularly those making calls on the go outside the office, may appreciate having status reports and current rates available on mobile devices. Being able to order credit reports is another feature offered by Ellie Mae Inc., a mortgage lending software provider in Pleasanton, Calif.
Jonas Moe, Ellie Mae’s vice president of product strategy, says the company’s approach is “to enable the loan officer in the field.” Only a portion of what appears on the desktop version of a bank’s loan origination software is on phone apps. But that still can be enough to help originators, some software providers say. Managers also can benefit by obtaining real-time status reports on mortgage applications.
Security issues cloud the picture for mobile apps, however. Losing a smartphone or tablet computer that’s carrying loan file information could be disastrous.
Community banks that have virtualized their servers in a cloud computing environment are able to handle this issue. Loan officers and managers then can access data securely on any mobile device. Personal information remains in the cloud, rather than being downloaded.
Nevertheless, most mortgage origination software providers either have or are developing a mobile app, so it’s best to begin investigating by contacting your community bank’s current software provider. You’ll find positive options to choose from—but make sure the technology is right for your bank. Gauge its staff, customers and business partners about whether they would use a mortgage app before implementing one. Also consider that some mobile apps only work on specific hardware devices.
Howard Schneider is a financial writer in Ojai, Calif.