Moving Mortgages Into The Mobile Era –

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Millennials – we have long been assured – were never, ever going to buy houses. Some hypothesized that the lingering memory of the Great Recession’s origins in profligate mortgaged underwriting would scare them away forever. Others pushed a theory that the supersized costs of college combined with the stagnant economy that greeted millennials as they entered the workforce left them en masse too far behind the eight ball financially to ever be serious real estate investors.


Some people blamed eating way too much avocado toast.


But whatever the origin, the conclusion was assumed as Gospel – millennials either by choice or necessity were destined to be lifelong urbanites renting their accommodations.


The funny thing about large cohorts of people – however – is they have an annoying habit of being hard to predict in the long term.  Millennials – particularly older ones that are now much closer to being 40 than they are to being 20 – have turned out to be as frugal, careful and wary of taking on mortgage debt they can’t afford, Caliber Home Loans’ EVP of Technology Caroline Watteeuw told PYMNTS in a recent conversation.


But, she noted, that hasn’t stopped them from being mortgage customers


“This is frugal generation that’s realizes that a mortgage with tax payments and insurance included is still much lower than paying rent, especially in desirable markets. They are becoming homebuyers.”


And quickly.  And Caliber knows from mortgages – they are the fourth largest non-bank mortgage lender in the U.S., and mortgages are the financial service they mainly offer.  A little over 70 percent of the mortgages are purchase mortgages – refinancing is less than 30 percent of their business – “we primarily service people looking to purchase a home.  That is our business model.”


The model, Caliber noted, also includes 1,500 loan officers spread across all 50 states serving a customer base that hits most points on the credit spectrum and that is becoming increasingly millennial in nature.  Today millennials represent about 40 percent of Caliber’s customers – and that number is growing.


And Caliber, according to Watteeuw, is growing its offering to meet them – with the launch of three separate, but connected, mobile apps designed around creating the right balance in the consumer mobile mortgage experience.


High Touch Meets High Tech


Caliber’s latest mobile moves are actually a three-in-one release – with the Caliber Home Loans customer facing app, a loan officer facing app called Caliber H2O and an app for real estate agents and builders called Caliber Pipeline.


“We are trying to build, around our borrowers, a virtual community of people who are digitally enabled so that we can get the buyer into their home.”


That doesn’t mean, Watteeuw explained, that customers simply need the entire mortgage buying experience digitalized and automated.  Far from it, she noted, the network of 1,500 loan officers that make up Calibers sales network are the intellectual property that keep the firm going.  Mortgages, she noted, are complicated products that require precision and even the most millennial customer on Earth still is going to want access to a loan officer to answer questions on demand.


The high-touch part of the business, she noted, is non-negotiable.


But, by arming everyone involved in the transaction with the best mobile tools, the high-tech side of the business can best aid those high-touch interactions – and really enable a customer to be the driver of their experience.  For the consumer facing home loan product is means being able to manage the loan process step by step – and then (once a deal is closed) allowing them to manage all elements of that loan from within a single mobile dashboard


The only thing that is not yet possible for borrowers within the app, she noted, is a full mortgage application, though that is coming soon.


The Caliber H2O app, on the other hand – is the broker facing app that allows the loan officers to be constantly wired to the progress of the mortgage product – and ever accessible to the customer who is going through the process.


“Our loan officers are our best intellectual property, and making sure these loan officers are supporting our millennials population with the best experience possible – that was really our aim in creating this app.”


The loan officer, she notes, is always a few taps away from a client file – instead of having to rely on a hybrid of phone email communication.  When the customer wants to talk to their loan officer directly – they can, Watteeuw noted. Or they can use the direct messaging features within the app, or they can just communicate by document exchanges.   H2O, is designed to tap into the most useful potential of mobile in the process – by making the loan officer always in reach – without having to feel as though they are ever present.


It’s similar logic, she noted, that goes into the Pipeline app for builders and real estate agents – so that necessary information can be exchanged between parties – without the buyer having to act as the go between courier.


The Power Of The Backend


Buying a house for any customer – but particularly for a millennial first-timer – is a complicated process by nature.  And it is also one that is easy to be intimidated by.


Some parts of that are just a reality of the process – there will generally  be a lot of verification necessary, a lot of documents that need to be exchanged, a large cast of characters and a series of somewhat complicated payments that need to happen.  That can be greatly simplified – by making it easy to electronically sign and distribute documents for example – but some of that friction is healthy insofar as it makes sure that the process is well governed and good loans are underwritten.


But, Watteeuw noted – by using mobile to better connect the mortgage underwriting and later management process – a lot of the unhelpful friction that adds time and complexity to the process without adding value can be removed.  And by something as simple, she noted, as tying all parties to the same backend – so that the process, and what needs to be happening, is entirely clear to everyone involved.


“Because this is really a powerful interaction between these mobile apps and the backend.  That is the place where the loan is really moved through. Because we know so precisely at any point in time what we need from you – the borrower- or a realtor, or even our loan agent. It allows us to build that virtual community so that if you are stuck somewhere in this process, you can communicate with this loan officer via the click of a button, and get it unstuck again.”


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