Nicole Valentin-Smith of Fiserv on the Path to the Digital Mortgage

Nicole Valentin-Smith

Nicole Valentin-Smith is Director of Client Management, Digital Lending and Origination with Fiserv Inc. (NASDAQ: FISV), Brookfield, Wis., a global provider of financial services technology platforms. She can be reached at

MBA NEWSLINK: What is standing between lenders and the digital mortgage now?

NICOLE VALENTIN-SMITH:  We see three primary hurdles that the industry must overcome in order to get from where we are today to a true digital mortgage experience. The first of these is system integration. Disparate systems that are not properly integrated can be difficult, expensive and time-consuming to implement and maintain. Poor integration can negatively impact data quality and even increase the risk of security breaches.

The second challenge is lack of automation. Lack of automation  can prevent applicants from quickly and easily obtaining accurate, real-time loan status information. In addition, , staff may be unable to confirm precisely where the loan is in the process when a borrower contacts the lender directly. This negatively impact borrower satisfaction and put a lender’s reputation at risk.

The third obstacle is outdated processes. An especially serious concern lenders face when implementing new technology is that it will simply speed up — but not fix — a flawed process.

MBA NEWSLINK: What problems are lenders who have not made the digital transformation facing today?

VALENTIN-SMITH: The biggest problems lenders face today are the high cost to lend and low overall profitability. We all have seen the metrics and the MBA’s own research bears this out. As long as the industry is still paper-based, these problems cannot be solved.

Home finance has traditionally been paper-based , with information passed between partners in documents and forms. We know that this process creates significant time delays and the potential for errors that lead to inconsistent and inaccurate data, resulting in low quality files and higher loan origination costs.

As a result, virtually everyone in the industry is moving toward digitization. The digital mortgage removes paper documents and speeds up collaboration while reducing data errors, leading to higher quality loans at lower costs. While the industry is currently awash in marketing noise about the progress lenders have made toward this goal, the reality is quite different. The solutions presented to lenders up to this point have not completely solved their problems.

MBA NEWSLINK: What are the waypoints on the map that leads to the digital mortgage?

VALENTIN-SMITH: We have mapped out this journey and found a number of critical waypoints. Together they bring into focus what an ultimate solution would look like. The first of these is that lenders must have a platform that is a high functioning and capable of automatically analyzing loan data, comparing information supplied by a vendor to data already within the LOS and alerting lender personnel if there is a conflict. That requires AI and rule-based workflow.

Secondly, lending platforms must be capable of automatically obtaining data about the borrower, property and loan by tapping information providers and then analyzing/validating the data they return. APIs offer the ability to tie processes and disparate systems together, so the second waypoint is to have robust APIs and data access.

Additional waypoints include a borrower-focused, web-based experience that allows users to self-serve but remain connected in real time to the loan officer, the loan processing department and closing personnel. Another is optical character recognition so the platform can electronically obtain necessary information from documents when it is not already digitized, supporting the process of aligning file documentation with the LOS record. That also allows the lender to reach another waypoint, digital compliance analysis, which has become a necessity.

Finally, the most successful lenders will embrace a holistic approach that drives every digital process, aggressively eliminating paper through e-signing and automated document routing systems that ensure accurate data flow to end investors and servicing platforms. Only by completing all of these steps will the lender arrive at a true digital mortgage.

MBA NEWSLINK: What forces are driving lenders to go digital now?

VALENTIN-SMITH: There are three compelling reasons for lenders to act now on the digital mortgage process.

First, regulators and investors are driving the industry to embrace digital. The Consumer Financial Protection Bureau’s eClosing pilot program, Fannie Mae’s® Day 1 Certainty™ and Freddie Mac’s® AIM programs have signaled to the industry that the time for change is now and the future is digital. In addition, the recent appetite on the part of the GSEs for e-mortgages should encourage all lenders to move to digital lending as soon as possible.

The second reason lenders must find a better way to transact business is that consumers are demanding it. Home loan borrowers want control, transparency and instant gratification. They want hands-off, do-it-myself digital banking services … until they don’t. When they find they need help, they want access to a live expert immediately. Fannie Mae’s National Housing Survey clearly reinforces this, as do the annual consumer satisfaction surveys conducted by J.D. Power.

The third reason that lenders must adopt change is to compete with new industry competitors. New entrants into the mortgage industry are digital natives and what they lack in secondary market and compliance experience they more than make up for in the delivery of excellent consumer experiences. Lenders that don’t move into a more competitive position now could quickly fall behind.

NEWSLINK: Is this becoming a “go digital or go out of business” scenario?

VALENTIN-SMITH: We believe it is. Too many forces are driving the industry in this direction. Our research backs this up, our survey, Expectations & Experiences: Borrowing and Wealth Management, found that consumer comfort with completing digital loan applications and comfort with mobile interactions has increased dramatically.

NEWSLINK: What are some key steps you would recommend for lenders in crafting a digital strategy?

VALENTIN-SMITH: Consumers are accustomed to easy and intuitive online and mobile experiences, and they have those same expectations when applying for a mortgage. Providing holistic, integrated digital lending capabilities will help meet borrowers’ changing behaviors, preferences and demands.

Employ mobile responsive design to tailor information for smaller screens. Make it easy for consumers to communicate with you in every channel. Reassure consumers that every safeguard will be taken to keep their information safe.

(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; or Michael Tucker, editorial manager, at