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Disrupting The Mortgage Lending Norm by Embracing the Digital

By Mike Koch, Kristin Keller and Yazmin Palacios of Amplify Credit Union

Mortgage lending in the real estate sector is a time-worn process that is slowly putting pressure on credit unions and banks that are not willing to adapt to a rapidly changing industry.

“Credit unions and banks that are not currently working to adapt their operations digitally, have a rough road ahead of them,” said Kristin Keller, Vice President Real Estate Lending at Amplify Credit Union.

In a quarterly report released by the Mortgage Bankers Association (MBA), the average total cost to originate a loan of any type at the end of 2017 was $8,475. With the advent of simple applications like Rocket Mortgage and Quicken, potential homebuyers are equipping themselves with a fast, easy-to-use solution. However, obtaining a loan and understanding the process can’t be done with an application alone.

As technology drives the mortgage industry forward, it is up to the credit unions to ask why this old process is still around and how we can make it better. This will evolve their operations and create a faster experience with better and more consistent results.

The mortgage lending team of Amplify Credit Union, headquartered in Austin, Texas is on the forefront of breaking the mold of slow and expensive origination, decreasing the time to close significantly and making the process a more rewarding one for its members.

The Goal: From application to close in eight days

There is no denying that consumers are embracing the mortgage software and applications that have been made available over the past five years with the speed of their service being the main appeal.

In a 2018 Ellie Mae Origination Insight Report, the average mortgage loan closed in 41 days.

Recognizing technology’s influence, but the need to blend personalized service as well, Amplify is reforming its mortgage lending process at an accelerated level to change the real estate lending world. The goal is to make the time from application to close, eight days.

“I’m an evangelist to this conviction,” said Mike Koch, Chief Lending Officer at Amplify Credit Union. “We want to make the lending process easy and informative. If members want the face-to-face interaction, they can certainly still have it, but the digital revolution train has taken off at Amplify and we have an efficiency that our members believe in, with a personalized service.”

The credit union is rapidly moving towards this goal with an investment in two driving forces: the technology and the people.

Installing the Digital Mind Set and Why?

With so many digital and AI platforms currently on and flooding the market, there isn’t a one size fits all.

Amplify’s first step towards the goal of eight days to close, started with a breakdown of all points and tasks of the loan process to discover where digital transformation would help the most. The lending team started by asking why. Is this the best way we can handle this function? Is there a better way?

Based on the response to these inquiries, Amplify was able to identify where digital transformation could best support the consumer’s journey.

A dramatic change in the front-end process that streamlined our workflows came in the form of Blend, user-friendly, digital software that eliminated many of the manual paper process of old and relies on machine learning to optimize submissions. An inherent decrease in the time from application to close, one of the biggest changes the credit union has seen is that now that the vast majority of applicants want to go with a fully digital process.

Yazmin Palacios, Assistant Vice President Real Estate Lending said, “We have found that we can optimize anything in our lending process by just asking why.”

Through this reformation strategy Amplify has streamlined many functions of the loan application journey through third party venders so that the burden of obtaining and providing documentation is taken away from the borrower. For instance, the credit union utilizes an AI that pulls and reviews bank items and documents so the borrower doesn’t need to provide anything on their end. This is exponentially faster.

“Because this evolution is happening at such a rapid rate, the credit union has developed a roadmap of the future for its lending operations. However, there is no end point,” said Keller.

This increase in digital and AI functionality has broadened the capacity for the lending team and as such, accentuates the importance of the second engine of the credit union’s revolution: the people.

Going Digital Starts with the People Using It

Just as important (if not more) than the technology, is the people they are bringing in and training. Amplify has invested a significant amount of time and energy engaging and training the current staff to bring them up to speed with what their new digital capabilities can do and it has been met with enthusiastic acceptance.

Because the technology being introduced today is more intuitive and user-friendly than in the past, the need to fill as many roles with specialty positions isn’t as drastic opposed to multiple years ago. Amplify’s employees are now excited and want to adopt these digital capabilities because it makes their jobs better.

However, these operational improvements have changed the environment for the salesperson staff as well. Amplify’s disruption to the norm has bred a need to focus on hiring the most knowledgeable and most adaptable employees. The desire was to build a great operations engine to serve as the strong foundation our sales team who could sell Amplify’s services knowing the customer (members) would be taken care of once they turned in an application.

“It’s critical that our people and the technology we are implementing work in tandem and in the most efficient way possible,” said Steve Stapleton, Assistant Vice President Real Estate Lending.

Amplify recently hired Steve Stapleton, Assistant Vice President Real Estate Lending to provide this impact. Hiring someone of his caliber to help build upon the credit union’s business unit only helps Amplify strive to be more innovative and continuously improve.

The operations team is dedicated to closing loans as quickly and easily as possible for Amplify’s members, which in turn enables our sales team to have the momentum toward building their client base.

The Path Forward and Continuing to Improve

The average 41 days to close a mortgage in the digital age is unacceptable. Amplify’s goal to drastically reduce this time period to eight days is bold, but becoming more attainable each day and it all starts by asking why.

The first and second phases of these digital implementations have been significant to reaching Amplify’s goal, but this is not where it stops. The process is continually under review by the lending team and everyone who touches these system; This way Amplify maximizes the AI that is available today to reduce turn times.

Koch concluded, “At Amplify we’re not only challenging the mortgage lending industry norms, but constantly challenging our own systems. Ultimately we want to offer the best customer service immediately as it becomes available.”

This is the conviction needed to drive this change and the results are worth it.



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