As executive vice president of business development for Calyx®, a leading provider of comprehensive mortgage software solutions, Bob Dougherty is optimistic about the future of technological innovation. He envisions loans approved in three to four days, for example, and getting closer and closer to the goal of a paperless industry.
Yet, he assured, tech will never replace the value of human interaction.
“By no means will we get to a point where we will disintermediate the broker,” said Dougherty, during a conversation with Mortgage Media’s Dave Matthews during the recent Mortgage Bankers Association’s Technology Conference in Dallas, Texas.
“Brokers are vital to the mortgage industry,” he said. “No matter how much we automate the mortgage process, at the end of the day, people want to talk to people. Buying a home is often the biggest purchase you’re going to make in your lifetime. People want some assuredness as they’re going through the process to understand the steps, and that they’re going to be able to close and get their dream home.” Millennials, for example, may want to work on most details of their loan application themselves electronically — but when it comes time to submit the loan, they still want someone to talk to, to get them through the process. Dougherty cited studies by Quicken that show how interaction boosts customer satisfaction for the overall transaction — additionally spiking if the originator actually attends the closing.
So, what’s the role of a tech company in the mortgage industry? Finding ways to make things simpler and quicker, more streamlined and efficient, for all parties — the borrower, broker, and lender.
“How can we speed up origination, how can we automate what is going on in the background — I think those are key things that everyone is working toward to create greater efficiency,” Dougherty said.
Needs have changed year-to-year as Calyx has provided tech products to brokers, and right now the point of sale is a big focus. Dougherty discussed Zip™, Calyx’s intuitive, online borrower interview. Zip’s Q&A format makes it easy to use, which results in submission rates of over 70 percent, he said.
He also discussed the Calyx Wholesaler Marketplace, which enables brokers to connect with multiple wholesale lenders via a single portal—providing a sleek, quick and efficient experience. “Brokers can interact with participating wholesalers to close their loan without having to leave the LOS,” he said. “Wholesalers benefit by being easily accessible to a potentially new broker population.”
In addition, Dougherty noted, Calyx received Progress in Lending’s 2019 Innovation Award for NAMB All-In, a cloud-based platform designed to streamline workflow for mortgage brokers, launched in partnership with the National Association of Mortgage Brokers for use by its members.
Other high points from the conversation:
Paperless: According to Dougherty, everybody says they’re working toward paperless operations — and everybody says they’re almost there. Calyx is continuing to help drive this paperless effort within the industry.
An example of a paperless process is the verification of assets based on the information borrowers provide in the point-of-sale. Verification of employment is another example of a paperless process — which is now possible without asking for a W2 or pay stub. “When you can create those efficiencies for the originators, it’s a better experience for the borrower. The borrower’s overall satisfaction, once again, increases because they’re not being asked to produce volumes of documentation themselves,” said Dougherty.
It makes for a quicker process, too, of course — and that’s essential. “When I used to originate back in the ’90s, you closed loans in 30 to 60 days,” Dougherty said. “Now if you’re closing loans in 30 to 60 days, you’re about 45 days too late.”
Integration: “We love the GSEs, but they push a lot of changes and sometimes implementing required changes delays or stifles innovation,” Dougherty said. “It would be nice to have a period of time where we can just innovate as an industry. I think integrations among best-in-class providers are going to be a key to successful technology solutions.”
Seamless integrations are happening more and more, he said. “I think people are willing to cross lines to create better efficiencies and they’re becoming more like ‘frenemies,’ if you will. Eventually, we will be approving loans in three to four days. There will be this new ability to say to the borrower, ‘You’re fully approved. You’re fully cleared to close. We’ll close when you’re ready.’ Versus the other way around where the borrower is accustomed to waiting and asking, ‘When can we close?’”
Appraisals: The industry today faces a demographic challenge, Dougherty noted. The average age for appraisers and underwriters is nearly 60 and it’s not clear who is going to replace them.
“How will we combat that? I think the amount of data the GSEs have collected on homes is going to be vital to how we value them in the future. I don’t think appraisers are going away either. But I believe the industry is going to have to figure out technology alternatives to determine values because the appraiser pool, and the underwriter pool, is continuing to shrink.”