Technology is speeding up the mortgage process
As banks and credit unions undergo digital transformation, the mortgage department is getting its share of attention. This is making the mortgage process much faster and less manual.
Phillip Petrie, vice president at ServiceLink, joins us to discuss how automation and other advances are streamlining the mortgage business.
A few takeaways from the conversation:
- The tech being implemented is speeding up loan cycle times so borrowers can get to the closing table much quicker.
- Having a better understanding of mortgage services and partners could help bankers improve their own processes.
- Another potential benefit is to being able to educate customers and provide them with more transparency on fees.
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Below is a full transcript of my interview with Phillip Petrie.
Phil, could you start by giving us an overview of ServiceLink and some of the key services that the company provides in the financial space, and also where you fit into the organization?
Yeah, sure. So we’re a part of the FNF family of companies, and we’re one of the nation’s premier providers of technology-enabled mortgage services for the residential real estate industry. And we’re probably most known for our access technologies and the line of products that we leverage – some AI and machine learning, extending and enhancing some critical consumer digital touch points throughout the mortgage lending lifecycle. I’ve been working in the industry for about 25 years now, and I’ve been with ServiceLink for 12 years. My current role, I’m responsible for overseeing title product development, strategy and research, in addition to informing the implementation of some new access products and services in the title space.
As you say, you’re on the title product side of the business. So what’s that been like with all of the housing purchases due to work from home and the big flurry of refinancing that we’ve been seeing as rates drop during the pandemic?
It’s been a really interesting time in the title business, as we’re kind of working to scale production with a new set of challenges from the pandemic. And we were also experiencing record volumes at the same time. I think overall, we were pretty successful in doing this as we saw our overall productivity increase when we transitioned to a work-from-home model ourselves. Luckily, I’d say the technology and infrastructure we had in place at ServiceLink meant our clients were pretty much seeing uninterrupted services because we kind of pivoted in about 24 hours to that work-from-home structure, and that was crucial for us and our clients in order to maintain operations during this difficult and uncertain time. I’d also say from an industry-wide standpoint, it seems to be a time when the technology was actually ahead of the business, as some of the tools enabling that work-from-home strategy were not only readily available, but they were efficient and accessible.
A lot of what you do is out of sight from the lender. So it’s not always understood how it all gets done, I’d imagine. How well do you think mortgage bankers, mortgage companies, how well do you think they understand what goes on behind your curtain? And is there a business reason for them to understand it better?
I would agree with you. It’s pretty much mostly out of sight, but we’re providing some key products and processes that would help them determine risk by performing validation of public-record sources, interpreting them, determining that risk and providing title commitments, title curative and settlement services. We’re leveraging some non-traditional data sources to provide some initial assessments of risk before that actual title is even completed. It’s becoming more of a standard as we’re kind of aggregating that data, analyzing it and then providing a decision, or like a grade, that we will assist the mortgage banker or a mortgage company in identifying and kind of streamlining their internal production queues, determining their risk and developing some other uses which should ultimately benefit their mortgage consumers. I think a big reason for this, too… It is out of sight, as you mentioned, but it’s important for them to understand what really goes on behind our curtain so they can somewhat relay the information to the consumer, and it kind of create a more transparent and streamlined process from that perspective, which is something our research has shown consumers want more of in the home-buying experience. For example, I think it was about 30% of the consumer survey respondents in the ServiceLink State of Home Buying report, which looked deeper into some of the consumers attitudes and experiences when it came to home buying and refinancing, and as well as a role that tech played in that process. They kind of wanted more transparency into the steps, and another 33% wanted more transparency around the fees. I’d also say, as consumer confidence kind of wanes the closer they get to the closing table, it makes sense for mortgage bankers and companies working with those borrowers during the home purchase and some of the refi processes to kind of serve as a source of education. It makes a better process for everyone and helps to earn repeat and referral business for our clients as well.
You mentioned the technology side. Technology is permeating all sides of banking – how much do you leverage technology on the title product side?
We leverage it, but the title side has some limitations, as some of the data around the country is not all available digitally. We’ve been successful, though, in finding some solutions to convert that data, and once we get it in-house, our processes are very automated. So overall, we’re heavily leveraging technology for every aspect of title – data aggregation analysis, production, curative services. And I’d say probably more than most mortgage lenders realize.
Where is the cutting edge now, then, tech-wise for your corner of the financial services industry?
I would say it’s in the aggregation of the data sources – some traditional, some non-traditional – and leveraging some of the customized rule sets that we use to mitigate risk in producing fully automated title products. I also think the title companies are going to start to really see how they can leverage some of the historical data as another data source. And I’d say, as certain aspects of the title process have been using automation and as these more data sources become available, the demand and use case for this data is going to increase. I think it’s going to become an industry standard. And it’s interesting because I think the pandemic probably accelerated this for title companies as they were looking for and embracing technology changes. So there’s really kind of no turning back to the old ways of doing business.
For this data automation that you’re referring to, how much of this is being done through AI and machine learning now? And as you look ahead, how much potential do you see for AI playing an even bigger role in future automation initiatives?
AI and machine learning, we are utilizing them now, and I’d say as we gain more experience and more data, I expect that the use of them is going to continually increase, really improving the automation and kind of reducing the number of manual touches that we would be required to produce. Long-term, I think they’re going to play huge roles in any future automation initiatives. The title and settlement companies are beginning to understand how to leverage these tools and apply them to their processes and their services, both customer-facing and some of the back-office functions. I’d also like to add that we’re working toward providing some of the most accurate initial data, understanding that downstream changes to data will affect our clients and mortgage consumers’ experience.
The tech that’s being put to work in the mortgage title area, how does that directly benefit companies like ServiceLink and how, in turn, does it benefit lenders that you work with?
I would say as we’re continuing to streamline our processes and adopting automation, it’s going to allow us to scale quickly when the refinance transaction starts surging again, pretty much ensuring we can continue providing the service levels our clients expect. I’d say mortgage lenders are also going through some of these same enhancements, which are going to benefit everyone and ultimately reduce the loan cycle time, getting borrowers to the closing table faster than ever before. I’d say title processes that have taken maybe two to 10 business days are being reduced to minutes or hours.
When you think about how the implementation of your tech is going, what kind of challenges have you run into along the way? And how have you address those things and how have you learned from them as well?
I would say in certain parts of the country – primarily the original 13 colonies – most of the county land records still have not been digitized, and it’s kind of due to the depth of the information and the cost it would take to do so. So in those areas, we still leverage some manual title-searching processes, and we see issues with some of the document image quality. So we developed some internal process to address that. We’d also see it sometimes in areas where we can access the data using title plants, but the new process has really served us well overall. I’d also add that the title plants are starting to see increased demand for clean, well-structured, instant data, and as they are, they’re responding and they’re continuously improving their data and offering new products and services.
A big trend these days in financial services, driven by online retailers and streaming services and companies like that… It’s the idea of personalization. The idea that customers have individualized experiences, rather than a one-size-fits-all approach. Is personalization something that is a priority in your world?
I would say one of the things that we see is during the loan-closing processes, we’re usually the first people that would have any direct or in-person contact with the borrowers or mortgage customers. So we sometimes tend to bear the brunt of any problems or frustrations they may have experienced throughout that entire loan process. We understand it, and we do have some methods to track and report in an effort to improve the overall customer experience. It’s going to be interesting to see how further personalization is going to develop, especially as all these aspects of the loan process, title and settlement services are going to continue to automate.
Phil, based on the numbers that I’m seeing, it appears that the current refinancing cycle is sort of winding down now. So before the next big upcycle begins, if you had the power to make a unilateral change to something in your corner of the business to make it run better, what would that change be?
As title process automations are maturing, and I think they’re going to quickly continue to, I think the next processes to really see that as an enhanced automation are going to be the ones related to the loan closing and settlement services. There’s several functions associated to them that really still require manual processing and review of loan-closing packages. They’re very difficult to automate because the number of variables, the amount of data in there, and a lot of it’s paper, and that actually has to be reviewed. But we’re on that path and I think will be well-positioned for the next cycle of refinances.
You get all that done, and the entire closing process will practically be a snap for the borrower to get through. Phil Petrie, vice president at ServiceLink, thanks again for being with us on the BAI Banking Strategies podcast.
Yeah, thanks, Terry. Again, I really appreciate the opportunity.