How Lenders are Adapting the Next-Gen Mortgage Model

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When it comes to choosing the right technology solution to drive operational efficiency, the process is like upgrading a home: your choices are to build, buy, or renovate.

 

Choosing from these options is not always simple, but with consumer demand for a better experience and rising production costs, building the next-gen mortgage is now a necessity, not a luxury. And making the right strategic move will determine whether the company ends up like Blockbuster or Netflix.

 

Let’s take a look at the 3 approaches and how a homeowner’s perspective could be applied to choosing technology solutions for the next-gen operating model.

 

Option 1: Build

 

Much like someone who’s building a house, some lenders might have a specific vision that no solution provider can meet. So the first option is to build your own platform.

 

The upside of this approach is that you get what you really want — a custom solution — but it could be costly and will take longer than buying something that already exists. Still, building your own solution could be the right decision if you have the time and the resources to invest.

 

Having a strong foundation is critical and data should be the foundational building block. Most legacy systems face issues of multiple data sources, lack of transparency, and difficulty in accessing that data for insights.  This leads to employees having to check and recheck data to avoid errors and bogs down operational efficiency.

 

A data-driven solution is core to building a modern technology platform, as it gives you confidence in data quality, which allows you to accelerate decisions and speed up the transaction process. And you don’t have to do it alone. Much like a contractor bringing in experts to help them build components of the house, look for solutions to plug into your platform that will help ingest data, map data for accuracy and provide tools to make the data accessible.  

 

Option 2: Buy

 

Much like buying a new home, buying an off the shelf technology solution has its advantages and pitfalls. It’s certainly faster than building your own, but with less opportunity for customization.

 

You may end up with a bigger home in a neighborhood with better schools that meets some of your requirements, but you may get stuck with that awkward kitchen layout.

 

Important factors to consider when you buy an existing solution:

 

  1. Length of time for implementation and configurability options
  2. Smart automation capabilities to minimize mundane tasks for maximum efficiency
  3. Whether it has the ability to meet requirements for compliance
  4. Most important of all: Whether this single solution meets your short- and long-term business goals

 

Option 3: Renovate

 

Let’s say you bought a house built in the 1950s. The kitchen is outdated, the bathroom has a pink sink, and the whole place needs a fresh coat of paint.

 

Renovating your technology solutions is like a makeover of your existing infrastructure. This approach can be smart and cost-effective if the goal is to see immediate gains on efficiency and ROI.

 

Working closely with mortgage companies for the past 15 years, Capsilon has been building technology that works alongside existing systems to address major pain points in the end-to-end loan process by making data easier to work with.

 

By automating up to 80% of the manual, repetitive tasks throughout the loan process, lenders are able to:

 

  • Increase employee productivity
  • Drive down costs
  • Reduce risk
  • Speed up cycle time

 

It’s important to note that in recent years, the common theme around the “renovation” approach has been focused on the front end, for a modern consumer portal. But companies with strategic long-term thinking are examining their options holistically, to improve the end-to-end digital mortgage experience for both borrowers and employees…because conventional wisdom tells us if you only replace the faucet but keep the old pipes, your kitchen is still not functioning well.

 

Whether mortgage companies choose to build, buy, or renovate, their next-gen mortgage experience will depend on their strategic objectives, resources, and timeline. Whatever approach is chosen, one thing is for certain: as competition grows more fierce and the industry experiences consolidation and layoffs, now is the time to invest in the future.

 

Those who do make the decision to automate and invest in the right technology will gain a competitive advantage and thrive. 

 

Are you ready to see how automation can help your company be leaner, faster, and more profitable?

 

If you’re ready, we can help.

 

Companies using Capsilon’s data-driven automation solutions see a 400% ROI within the first year. Schedule a demo and get an ROI assessment personalized for your business.

 

  • Decrease loan setup times by up to 50%
  • Increase underwriter productivity by up to 25%
  • Reduce buy back risk, enabling 100% of purchased loans to be audited in a third of the time

 

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