Savvy lenders are already preparing for the next valley – Here’s how

For many in the housing industry, the events of 2020 accelerated tech adoption. Despite the increased pace, the industry as a whole still has room for continued tech development and usage. HousingWire sat down with Renata Sheyner, vice president of product at CreditXpert, to learn more about key technologies that lenders need to give more attention to.

HousingWire: Why do you feel it is important to continually develop and use new technologies?

Renata Sheyner: Two key industry factors drive the need for continual use and development of new technologies.  First, mortgage lending is highly volatile.  Over the last 30 years, there have been roughly five major volume peaks, followed by five volume valleys.  We expect 2020 – 2021 to be the sixth in the series. So, while demand is high now, savvy lenders are planning for the next valley.


Second, productivity – and its counterpart, profitability – are challenging to maintain in this competitive environment.  While the past few years have been lucrative for many lenders, the previous decade is a woefully different story.   

This inherent variability makes it difficult for lenders to consistently meet business goals and manage costs year over year.  It also makes it difficult for lending teams to staff appropriately for volume fluctuations. This is where technology demonstrates its value. Technology helps to reduce inefficiencies and make people and processes more productive. Technology is often easier and faster to scale up or down versus human capital.  It helps you run structured processes that deliver results in every cycle, whether high or low. 

HW: What impact do you think the previous year has had on automation and the use of new technology for the mortgage industry?

RS: If there is one thing the pandemic exposed, it’s that the mortgage lending industry is heavily reliant on its processes. Since many of these processes are manual, lending slowed down significantly in the early months of the pandemic. But the lenders and servicers that were able to quickly transition to technology-driven processes had a competitive advantage as the year progressed. Individual loan officers became the heroes for their borrowers who were looking to refinance or purchase a home.  

In addition, the high volumes magnified the deficiencies in the industry’s technology stacks, as only stress on a system can.  As I mentioned, one of the benefits of technology is its ability to scale quickly. Most lenders and industry servicers we spoke with last year were struggling to hire as volume grew.  Scaling up technology is faster and makes the existing team more productive.

What are some key areas in the mortgage industry that need the most attention when it comes to developing new technology or processes?

RS: We need to learn from this stress the pandemic placed on systems and apply it to every lending process. Take lead management, for instance. Lenders spend a significant amount of time and money bringing prospects into their pipeline, only to have many of them slip away. In an up market, it’s easy not to worry about those lost prospects – but that is still a wasted investment in lead generation.  Putting systems in place now to systematically track and nurture prospects through the pipeline not only optimizes profit at present, but also sets you up for success when the market inevitably falls. It ensures a smooth transaction; one your borrowers will remember and share with others. That makes every mortgage the relationship springboard it ought to be for future business and gives you a competitive advantage over the lenders that start setting up their processes during a downturn. 

Also, mortgage lending is one of the most tightly regulated financial services, and the regulations are remarkably complex. That opens the door to errors and compliance issues. Well-engineered processes and systems mitigate that risk through documentation and clear communication for all teams and departments involved.

HW: What are some recent advances CreditXpert has made that benefit lenders?   

RS: We’re passionate about the impact our products have on the lives of borrowers. That passion is not just about helping lenders improve processes in order to close more loans. It is driven by our shared mission with lenders and our partners to make homeownership more accessible and affordable for all Americans.  

Credit is one of the top reasons potential borrowers don’t qualify for mortgages or don’t get the best possible deal, according to Home Mortgage Disclosure Act Data (HMDA) data.  The good news is that technology offers a vision into the potential of every borrower and a simple, accurate way to address the credit side of the mortgage equation. 

We’re constantly innovating at CreditXpert. One of our most recent product evolutions, CreditXpert WayFinder, released the year prior to the 2020 volume surge.  Wayfinder made obtaining a credit score improvement plan faster and easier so that mortgage loan officers could show their borrowers exactly what steps they should take to improve their credit profile. In just moments, lenders could get their borrowers a transparent and actionable credit score improvement plan.   Versus the alternatives – letting a customer go or building a plan by hand – this is faster, more accurate, and more likely to result in a prospect becoming a borrower.

CreditXpert products appear on more than five million credit reports each month. Half of the top ten mortgage originators trust our credit improvement plans to ensure their borrowers achieve the best financing possible.  

If your business buys mortgage credit reports, ask your credit report provider for CreditXpert. Learn more at creditxpert.com.

The post Savvy lenders are already preparing for the next valley – Here’s how appeared first on HousingWire.

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