Overcoming the challenges direct-to-consumer lenders are facing

HousingWire recently sat down with Total Expert Director of Technology Alliances Josh Lehr to learn more about recent trends around direct-to-consumer lending.

HousingWire: How have trends around direct-to-consumer lending changed over the past year?

Josh Lehr: Pre-pandemic, online home buying existed, but over the last year, shopping online for mortgages became much more popular and convenient as meeting in person with a loan officer was not an option. In fact, 36% of Americans said they would be willing to buy a home entirely online.

In addition, a new generation of tech-savvy home buyers entered the market and prefer digital experiences over in-person interactions, even when it comes to buying a home and completing the mortgage process. 39% of Millennials and 36% of Gen Z said they would be comfortable buying a home online. All these factors plus historically low interest rates have led to a surge in direct-to-consumer lending over the past year.

HW: What are some of the challenges direct-to-consumer lenders are facing?

JL: Traditionally, consumer-direct lenders focused on being the first to call and get a hold of a consumer when they submitted an online form for a mortgage or refinance. While this may work for some consumers, with increasing regulations around spam, heightened consumer expectations and an increasingly competitive online marketplace, it is not a sustainable model. Consumers are not looking for the first to call. They now have the resources and know-how to compare lenders and find someone that is going to get them to the right product.  This makes it extremely important for lenders to deliver informed messaging that resonates with the customer at every touchpoint.  

Consumer direct lenders are also facing higher operational costs. During the last year, lenders brought on more staff and implemented technology to originate historically high volumes of refinances due to record-breaking low rates. As refinances plateau and the market shifts to a purchase environment, lenders will need to do more with less.

And while we know it is much more expensive to acquire a new customer than it is to retain an existing customer, the average lender only retains 20% or less of borrowers. Consumer direct lenders will need to expand their focus beyond closing the transaction. They will need to focus on the entire customer journey to retain borrowers, take advantage of the relationship they invested in, and be competitive in the future.

HW: What is standing in the way of direct-to-consumer lenders overcoming these challenges in terms of technology?

JL: There are three main issues with the tech-stack standing in the way of providing a better consumer direct experience which ultimately leads to retention and competitive advantage: sales and marketing platforms bolted together versus a single unified platform; lack and/or centralization of actionable data and insights; and lack of intelligent automation. 

In the past, consumer direct lenders were forced to bolt together three core customer experience technologies—lead management, CRM and marketing automation. Integrations only go so far in connecting the dots to fully understand the borrower and workflow performance. While there are great technologies to support the process, integrations to these core platforms are difficult to implement and manage, leading to a lack of innovation in the process.  

Although integrations have come a long way, actionable data and insights are still trapped in individual system silos and cannot be proactively extracted to give a complete view of the customer. Without that holistic view, loan officers don’t have the information they need at their fingertips at the point of contact to provide value and stand out among competing noise.

Overall, disparate data and outdated systems are preventing lenders from intelligently automating interactions and communications personalized to the consumer on through their preferred channels, with messages that resonate.

HW: How does Total Expert help lenders navigate these challenges?

JL: Total Expert for Consumer Direct is the first platform built on a single data model that unifies lead management, marketing automation and CRM capabilities in one. It ensures lenders can develop a complete understanding of each consumer based on their unique financial needs and deliver a personalized and valuable digital loan experience.

Total Expert for Consumer Direct enables mortgage lenders to drive a better consumer experience from lead to customer for life with purpose-built functionality, including:

  • 360-Degree View in one platform with industry-leading integrations including lead generation, retention, and origination tools.
  • Visual Lead Routing connects leads with the best loan officer using insights such as lead attributes, loan officer availability, and loan officer qualifications and performance, in an easy-to-use, drag-and-drop experience. 
  • Communications Package with robust engagement tools, including a dialer, two-way SMS text messaging, and lead activity views.
  • Intelligent Automation to automate outreach using lead profile and behavioral data to drive conversations at key touchpoints in the customer lifecycle.
  • Pre-Built Expert Content which includes pre-loaded automated marketing workflows, campaign content, and recommended best practices for direct lending engagement. 
  • Reporting & Dashboards to understand campaign performance and loan officer engagement for a true view into ROI in a single platform. 

In the future, speed alone will not cut it. An increasingly competitive mortgage market made up of digital natives is demanding a better, more rewarding digital lending experience. These borrowers favor personalization and customer service over being inundated with phone calls. Experience and connection will be the new competitive advantage.

Learn more about the evolution of consumer direct lending by registering for Total Expert’s upcoming webinar.

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