Mortgage brokers act as matchmakers. The Great Recession created a new regulatory environment that makes matching lenders with borrows very difficult for those with variations on regular employment. As the Gig Economy takes hold, sole proprietors and entrepreneurs find themselves under increasing scrutiny, often seemingly insignificant issues, like a car lease, set the bar between approval and denial.
Over the last several months one of our colleagues went through the process of refinancing his home. He is an independent consultant and his wife works as a staff member for a non-profit organization. They had a very high debt load, much of which was associated with student loans that started accumulating just as the great recession kicked in.
The transaction started with an e-mail introduction from a real estate broker, an e-mail response and a phone call. The next transaction was a loan application. Once the loan application was accepted, the mortgage company generated a templated request for additional information including:
For Purchases and Refinances:
If self-employed or if you own a rental unit: Two years of complete tax returns including all pages and all schedules of Individual, Corporate, and/or Partnership tax returns
Most recent two years’ W2s, 1099s, etc.
Most recent 30 days’ worth of pay check stubs
Two months in a row of most recent monthly banking statements which include the bank logo, bank name, etc., with all pages of the statements. If a statement is 6 pages (example 6 of 6 pages on the bottom of the page) we need all 6 pages including any blank pages. All deposits not identified may need to be explained and documented. (For a purchase transaction we need statements of all accounts you are using for your down payment.)
Other items may be needed once the application is analyzed. Some examples include: divorce decrees, leases for rentals, etc.
In addition to the above, for Refinances we need the following:
Most recent mortgage statement.
Insurance information (The coversheet of the current policy on the property works well.)
While the first interactions via e-mail might be expected, this request for additional information misses one very important factor: where and how it should be stored. Our colleague suggested using a shared file service in the cloud. He created a cloud-based directory and started uploading the requested documentation. He then authorized the broker and provided read access to the directory. The mortgage company would have been just as satisfied with e-mail attachments. E-mail would have created at least two separate one for our colleague, and one for the broker. With e-mail the parties might end up with different sets of files, likely organized in different ways. With the shared service they at least shared a common repository.
The sharing file service was a good start, but it only manages the files, not the conversations.
Moxtra would have provided a much better shared experience for all involved.
Once the initial contact was made, the mortgage broker could have created a Moxtra binder and shared that with the client. The instructions above would have included instructions on how to post the documents to the binder. The client and the broker would share a space. Any questions about documents could be asked on the document themselves. Conversations via text or voice could be handled through the binder, and recorded there, again, as a shared record.
Here’s how the Moxtra binder might look after the initial request for information:
Now, as the transaction matures, the lenders will want additional information. The same conversation can include both the request and the response. Requests can be input as to-do items with dates so that all parties can see what is due, and what has been completed.
The mortgage broker will likely hold conversations that do not involve the client. To support this, the broker can create a separate binder for conversations inside the office and with partners, but they need only manage a few locations rather than dozens of e-mails.
This approach to the interaction improves the customer experience in several ways including:
Maintaining a shared repository of all aspects of the interaction between loan processors, client services and the client. This includes documents, notes, phone calls and text conversations.
Reduced search time to find documents related to a transaction.
Eliminates issues related to missed e-mail messages. If the message is in the shared conversation, everyone in the transaction will see it.
Integrates markup of PDFs which the increase specificity of requests/questions. This also goes for shared screen meetings where either party can better explain themselves by referring to actual documents rather than trying to describe answers, relationships and issues.
Effectively integrates mobile options, including tablets and phones, to offer more timely responses.
E-mail may be the lowest common denominator transaction, and therefore presumed available to all, but it also creates extra work and encourages cumbersome processes with extra steps. By bringing all communications together, organizations like mortgage brokerage firms can save time and money while increasing customer satisfaction. In this case, Moxtra allows the mortgage brokerage firms to invest in a service that enhances their processes with little overhead added to the client beyond installing an app on their computer, tablet or phone.