Borrowers and lenders will face 3 new and unfamiliar ways of doing business
Extraordinary times call for extraordinary measures. Business leaders in all parts of the US economy are taking bold steps to respond to the Coronavirus pandemic. Those in the mortgage industry are implementing reforms that will be long-lasting in terms of how lenders operate and how consumers obtain financing. Here are 3 ways in which the coronavirus pandemic could change mortgage lending:
The COVID-19 pandemic has resulted in mortgage lenders revisiting and, in many cases, adopting measures to digitize the mortgage process. Many firms favor an omni-channel approach, giving consumers the option to work with loan officers in person or over the phone and online.
The current crisis has “brought forward” some of the internal conversations firms were planning to have about how to massively transform the online digitization and automated underwriting process for borrowers. That time is now, as consumers are opting to research and buy their homes online – not wanting to risk their health with in-person exchanges. One popular home listing website saw its online traffic for virtual tours increase more than 190% in March, compared to February. Another real estate brokerage experienced almost a 500% surge in requests for home video tours. Innovative realtors are even providing “drive-thru closings” in which customers and realtors exchange paperwork and keys while sitting in their own cars.
Delivering consumer relief with scale and speed
Keeping customers in their homes during strong and (especially in) weak economies must be priority No. 1 for financial institutions. We all learned from the Great Financial Crisis of 2008-09 that losing your job should not mean losing your house. Lenders aren’t just in the business of providing loans but helping consumers pay them off (and own their homes) as quickly and responsibly as possible.
As millions of Americans lose their jobs, many are facing the prospect of not being able to afford their mortgages. These homeowners are seeking what’s known as “forbearance,” a payment deferral so that borrowers can get back on their feet and return to a regular payment schedule. The coronavirus crisis so far has generated more than 3.5 million forbearance requests. Many firms have seen tens of thousands of requests from homeowners, with the most inquiries coming from homeowners with jobs in hospitality, travel, gaming, and fitness sectors. When the world (hopefully) returns to more normalcy, mortgage firms should always be on the lookout for ways to partner with customers to achieve the goal of responsible homeownership – and develop ways to help people keep their homes. Mortgage lenders should also search out mutually beneficial and productive partnerships with insurance agencies that are reliable and trustworthy, providing the homeowner with the right kind of coverage.
Leveraged technology to serve borrowers
In recent weeks, most servicing departments have experienced a surge in call volume, as customers are keen to learn what forbearance programs are available to them. The increased demand has made many rethink on how they can more efficiently and effectively serve customers.
While it’s certainly normal for some customers to call with questions, it’s clear that many borrowers – especially Millenials – prefer to interact online. Many firms are now exploring how to use artificial intelligence and chatbots to more quickly respond to requests across multiple formats such as websites, social media, and text messaging. The pandemic has certainly made the industry think through how brokers can use automation to better serve customers to get the information they need quickly.
While the pandemic didn’t create the need for digitization and automation, clearer forbearance policies, and better customer service, it certainly has made mortgage lenders prioritize these things – and the housing sector can emerge stronger and more customer-focused as a result.
Learn more about Momentum Insurance and how we build long-lasting and trustworthy partnerships with mortgage brokers. Our reputation in the industry is built upon a foundation of always taking care of our clients and our partners, not to mention our incredibly solid relationships with all of the best-in-industry carriers. Reach out anytime, any day; we’re always here to help.
Content from Market Watch