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Pain Points in Mortgage Lending

Before you start reading, write down (or mentally note) two things: 1) what is one of the pains you face on a daily, weekly, monthly, or some recurring basis?  And 2) what is a pain point that your BOSS (or your boss’s boss) faces in the same way?

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(No, seriously – write it down… 😉)

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Alright – now it’s our turn.  Here are some pain points that we’ve encountered with our partners in the mortgage lending space:

  • Disconnected processes
  • Pre-approved buyers no-showing up to appointments
  • Documents are often hard copy and must be tended to in person
  • Too much time passes by between interactions with customers
  • Your online customer-facing resources leave much to be desired
  • Your internal go-to-market activities are too slow
  • Customers have a hard time identifying the right loan/product for them
  • Closing processes take too much time (for both you and your customers)
  • Non-commissioned internal resources lack the incentive to work at 100% effort

I’m guessing that at least some of these pain points resonate with you and that they relate to what you wrote down.  If what you wrote down is different than anything you see in that list, I’d like to know what problem you’re facing, but for now, we’re going to dive into our list.

Disconnected Processes

This is a two-headed beast.  Disconnected processes can refer to business procedures and IT operations.  Problems in either area almost always cause headaches, confusion, and have negative impacts on your bottom line.  You need to start with a goal and then establish a plan to reach this goal.  One example might be a new online customer lending portal your IT teams are building.  Your IT team might have been given an overview and a goal, and then let loose on the project – but they need to be working collaboratively with business-minded personnel to make sure that the final project fits the needs of the people who will use it: your future customers and prospects.

Pre-approved buyers no-showing to appointments

This is a problem with an obvious impact: you can’t close business with prospective customers who never walk through the door.  In my experience, our partners have seen positive impacts on no-show rates when two steps are taken by our lending partners:

  1. They focus on creating a digital environment that makes their clients (both prospective and closed) more comfortable during their online interactions. This means focusing on the end user experience (“UX”) and creating online channels that allow customers to interact on their own terms, without confusion.
  2. They make sure there are touchpoints with their potential clients across a variety of channels. Without a modern digital environment for your internal teams, this is often too much to ask.  In this scenario, that would mean your reps would have to call, text, email, tweet, and tag by hand.  OK, maybe they’re not tweeting at or tagging their leads on social media – but keeping a regular cadence of interactions between you and your leads is essential.  Digital automation can help with more than just relieving this burden from your staff; it also helps assure that touchpoints aren’t missed and that fewer errors are made due to the human element.

Documents are often hard copy and must be tended to in person

The impact of this problem is straightforward as well, in that the more parts of a process take place over paper (as opposed to digitally), the longer the process will take.  An overlooked aspect of this issue is the element of human error.  Making a mistake on even a single document can tie up a lending process that is already stereotypically known for taking far too long – sometimes to the effect of causing property purchases to fall through.  Minimizing your paperwork processes reduces the risk of human error, especially when automation is introduced.

Too much time passes by between interactions with customers

Tying into the second problem above, your reps just don’t have enough time to keep up with all of their clients and prospects in a timely manner.  Look at this issue from the prospect’s point of view: would you be more likely to take a loan from an organization that made sure to touch base with you every step of the way, bringing value through information and a growing relationship; or from the lender that sent you an email after receiving your application and gave you a single call three weeks later?  The value in automating pieces of your reach-out processes is in staying top of mind and providing information when and where it is needed the most.

Your online customer-facing resources leave much to be desired

This is a much broader issue.  Some of you may have invested heavily in your websites and customer portals, making sure your website is easily navigable and comprehensible to the average consumer.  At the other end of the spectrum, some of you may be wondering, “why don’t we have a customer portal?”  My guess is that most of you reading this fall somewhere in between.  In this day and age, customers want to gather information and take care of business online – they’ve either grown up with the internet all around them or have been working online long enough to expect digital to have the answers to all of their problems.  It’s our goal to help you make your organization is fulfilling these expectations.

Your internal go-to-market activities are too slow

Let’s go back to the example of your internal IT team building an online customer lending portal.  Even if your IT and business-focused teams are working collaboratively through the process of building this portal, there’s a good chance the project will miss deadlines.  If your leadership is counting on this online service going live on a specific date, any delays will negatively impact the bottom line.  Missing projections and goals is never desirable, especially when these shortcomings are due to avoidable delays.

Customers have a hard time identifying the right loan/product for them

We’ve all been here.  It might have been with life insurance, terms of a car loan, or types of mortgage, but we have all struggled with identifying which product most completely fulfills our needs.  Take a look at your own FAQ pages: can you find whatever information you’re looking for within a few clicks?  If the answer is yes, that’s a good start.  If not, just imagine how difficult it is for your potential customers to find the answers to their questions; they have much less subject matter expertise than you to begin with.  If these people can’t easily find the information they want from your resources they’ll quickly look for other resources, taking their business with them.

Closing processes take too much time (for both you and your customers)

Buying a home is stressful enough without throwing in a few extra curveballs.  But that’s usually exactly what happens.  Paperwork gets put off until the last minute, and then has to be passed around between your internal teams, the real estate agent, and the almost-but-not-quite-yet homeowner.  Many of you might be thinking that these customers have already committed to a mortgage; does it matter if there are a few extra hurdles at the very end of the process?

Of course it matters.  And I’m sure you already know that.  These customers present an opportunity to be more than just a mortgage to you.  The couple who shares a single car but is a buying house with a two-car garage will probably look to use the other half of that garage.  If you don’t give these customers a pleasant and seamless mortgage process, they will have no reason to look to you for a car loan when they’re ready for that next step.  Circling back to User Experience, it is your responsibility to make this experience as frictionless as possible.  This opens the door not only to continued business with these customers, but also to the positive word of mouth and referrals these customers can choose to provide.

Non-commissioned internal resources lack the incentive to work at 100% effort

Your top salespeople are probably incentivized by commission.  Everyone working towards commission knows that more sales mean greater income; your good salespeople understand that they have to work hard in order to generate these sales.  The effort these top performers put into their craft may not be matched by their behind-the-scenes counterparts, who are compensated the same whether sales go through or not.  This isn’t to say that these employees are all slackers – a majority of them probably perform as you would expect them to.  It’s important (and difficult) to make sure everyone is held accountable.

Don’t forget to email us if you thought of any problems we didn’t list above – or if you think differently about one of the topics we did cover.  Reach out to me directly at ben.fischbein@tallan.com and I’ll address your specific pains; perhaps we can enlighten one another.


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