Adam Batayeh: What Mortgage Lenders Can Learn from Tesla

(With nearly 20 years in mortgage technology specializing in drastically reducing costs and chaos, Adam Batayeh is President of Lodasoft, Livonia, Mich., a Digital Mortgage Platform introducing intelligent Loan Manufacturing (iLM). The company’s website is www.lodasoft.com.

In 2017, Tesla’s big announcement that it would increase production of its Model 3 to 5,000 per week was met with skepticism. It was an incredibly aggressive goal that many analysts believed was unachievable. However, Elon Musk insisted it was, in fact, achievable.

Through what Musk called hyper-automation, Tesla rapidly increased manufacturing while reducing costs. Despite criticism and disbelief from others, the car manufacturer was able to deliver three times as many cars as it did the same quarter the previous year.

However, Tesla already had the technology in place to quickly ramp up manufacturing. Historically a cyclical business, mortgage lending has experienced substantial increases in volume, forcing lenders to throttle up their efforts, but those without an intelligent Loan Manufacturing (iLM) plan have been left with more challenges. Those with an active manufacturing capability have a much better chance at dealing with both the expanding and contracting nature of the manufacturing involved in mortgage operations.

This will be critical as the mortgage and housing markets continue to surge in 2021, requiring lenders to ramp up production until the industry sees a contraction. According to industry analysts, the U.S. mortgage volume may top $3 trillion this year. MBA is forecasting volumes to stay around $2.75 trillion, but some believe that number is too conservative.   

Rates are expected to stay at all-time lows and competition high as demand for housing remains strong. The number of days properties are staying on the market has dropped substantially. This, coupled with a scarce inventory, has pushed home prices up along with the average loan size. In fact, list prices for properties on Zillow has increased by double-digit rates since just October.

As Market Surges, Lenders Must Automate Mortgage Pipeline

With increased competition, mortgage lenders must automate their processes, but the mortgage process is best when technology and humans work in tandem to deliver a smooth, efficient, yet personable experience. Too often, organizations automate but fail to realize the importance of the human element desired by their clients.

From awareness to action, the more quickly and efficiently you can keep leads moving down the mortgage sales pipeline, the better, for all involved parties. With an iLM plan in place that leverages task-based automation, lenders can automate the grunt work, freeing up staff to provide the needed personal touch.

Create Urgency – Without Needing to Create More Time

To keep leads moving through the pipeline, customers need frequent interaction and reminders that you’re there for them – and you’re aware of their needs. On average, it takes up to eight touchpoints to turn a prospect into a customer.

Data can inform the frequency and timing of these touchpoints, but relying on a manual process for follow-up efforts is impossible and will fall flat. By automating the process, lenders can create and maintain a sense of urgency with clients to nudge them down the pipeline while conserving your own time and resources for bigger conversations.

Every Lead Type Managed

Prospects will come in all different types – referrals, internet leads, refinance and purchase prospects, etc. – but each requires a different interaction to close. On one hand, you could create different systems for different types of leads, which would require more people, more time and more headache. As competition heats up, this method could cost lenders business.

Again, an automated strategy with an iLM plan is ideal. By automating the process, lenders are able to maintain individualized integrity with each lead type with little to no lift on your part. The right workflow offers flexibility while driving toward the main goal: closing quickly.

Rinse, Improve, Repeat

With both an iLM plan and an automated process, lenders are not only able to convert leads more quickly, but they’re able to identify challenges and make improvements – and do so fast. By creating a predictable, repeatable and trackable process, lenders have visibility into why some leads may be getting stuck in the pipeline.

This is not possible with a manual process managed by multiple people. There is no way to effectively manage, track and communicate why you were unable to close certain leads, which is critical to know if you want to capitalize on the increased demand among homebuyers. With an automatic process, you can understand where leads fell off to make necessary adjustments, as well as how to reconnect with them.

Enabling Proactive Personal Intervention

By embracing automation and technology for tasks, lenders can allocate more time towards the application and closing processes – areas that require human touch to be more impactful. And with a predictable system in place, you have all the information you need to provide specialized customer support to close the deal — without having to track down individual information gatekeepers. Technology allows complete visibility to all parties and reveals next steps in the process, enabling staff to have quality time with customers rather than simply sending status updates.

As competition remains strong in 2021, mortgage lenders must automate their processes using the right technology – much like Tesla did to speed production and deliver on increased demand for its Model 3. The Federal Reserve says rates will stay low, housing inventory is still sluggish and driving demand and home sales up, and consumers want to move fast. The lenders with a digital workflow platform that leverages an intelligent Loan Manufacturing (iLM) plan will ultimately be the ones that keep pace with demand and turn out to be the winners this year.

(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.)