Dan Sogorka of Cloudvirga on Mobile Technology and the Digital Mortgage
Daniel Sogorka is CEO of Cloudvirga, Irvine, Calif., He has more than 20 years of experience leveraging technology to remove inefficiency and lower costs in the mortgage space. His track record as a senior executive at mortgage and real estate technology firms proves his expertise in executive management, consultative sales and product development.
MBA NEWSLINK: Borrowers today can apply for a mortgage via a digital mobile app–but after that, the process essentially hasn’t changed since the early 2000s. Why?
DAN SOGORKA: Because the focus has been mostly on improving the application process for consumers. This absolutely needed to happen, but it’s still only a small portion of the mortgage process. Fintechs–most with no real mortgage origination or fulfillment experience–are trying to serve one of the most complex sectors of the financial industry. That’s no small feat. A digital application is a good start, but a true digital experience requires all the pieces to come together for meaningful automation and cost savings from end to end.
While we are in a period of transition, luckily, we’re seeing more and more tech companies merging and partnering to offer streamlined, best-in-class solutions. All of this makes for a greater impact on the consumer and originator experience, both in terms of cost reduction and increased profitability.
NEWSLINK: What’s the current state of the digital mortgage?
SOGORKA: The fact that borrowers today can apply for a mortgage via a mobile device is a major improvement from two decades ago, but the process beyond that has remained largely unchanged. This can be frustrating for consumers: as everything from retirement plans to banking to shopping online has seen consumer experiences improve because of disruption from technology, while mortgages still take about 30 days to process. A digitized front end, while surely a sign of progress, is a far cry from our goal of a truly digital mortgage experience.
More recently, there’s been a burst of technology that’s addressed problems with different components of the mortgage origination process. While it’s been great to see certain areas improve individually, this has left loan advisors trying to manage relationships through six or seven different platforms. That’s just not conducive to the customer experience we’re trying to deliver.
NEWSLINK: What will a true digital mortgage look like, and how do we get there?
SOGORKA: A true digital mortgage will use digital tools and automation to significantly reduce origination time while creating a better experience for both lender and borrower. We’re getting there–there’s more mortgage technology than ever on the market right now–but unfortunately, most of it only addresses one part of the origination workflow. A true digital mortgage will be complete, efficient and easy-to-use.
We need to manage the mortgage experience from start to finish by combining previously isolated innovations along the mortgage process origination flow. These recent improvements, like secure document vaults and eSign technology, have helped us move in the right direction, but we need to merge them together and create a better experience for borrowers and originators. To do that, we need to combine new technology with industry and compliance expertise.
NEWSLINK: On what aspects of the mortgage process does technology have the greatest impact on lowering origination costs?
SOGORKA: Automation can help accelerate the more manual aspects of the mortgage process, which frees up originators and staff to spend more time on critical parts of the job that technology can’t replace–meeting with clients and building new relationships with partners. Without having to track down paperwork, review every document, and follow up with colleagues on progress, loan advisors can focus on what matters and complete smoother mortgage transactions while lowering costs through efficiency.
NEWSLINK: The average cost to produce a mortgage continues to increase. What are the main contributing factors to that increase?
SOGORKA: There are a number of components that make up this number, including sales and compliance costs. But, the rising number of individual point solutions that address only small pieces of the origination puzzle also contribute. The industry needs more platforms that either supply full digital solutions themselves or partner together to bring them to market, driving efficiencies and ultimately bringing costs down.
NEWSLINK: Loan originator turnover is a “hidden cost” to manual mortgage origination. What can lenders do to help retention?
SOGORKA: Employees are happiest when they have the best available tools to help them succeed in their jobs. Since loan advisors are generally a group of entrepreneurial self-starters, providing them with a complete platform that empowers them to provide an excellent customer experience and, ultimately, close more loans goes a long way toward helping retention.
Mortgage technology also helps give originators and staff the ability to do their job from anywhere, whether working from home, a coffee shop or shared work space. The additional freedom and flexibility provided by mortgage technology can also help reduce loan originator turnover.
(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)
