The proportion of lenders equipped with the automation required to close loans electronically rose sharply over the past year, but mortgage companies did not necessarily use it, according to a new report from the Stratmor Group.
Although the percentage of real estate finance firms with the technology needed for electronic locking has increased from 18% in 2019 to 43% in 2020, only 12% of them had an adoption rate of 75% or more, like the one on Thursday published report shows.
“One could assume that digital closures are building up like a giant ocean wave. However, according to our 2020 data, closure is lagging behind most of the technologies we are tracking, ”said Garth Graham, senior partner at Stratmor Group and author of the report.
The acceptance rate for individual users of e-closing technologies is 54%, but at company level only 30%. According to Stratmor, this leads to a net acceptance rate of only 16%.
Mortgage lenders found a lack of IT expertise to be a major hurdle.
“Lenders get used to working harder to attract loan handlers and handlers because everyone else in the industry is looking for them too. Finding skilled IT staff is even more challenging as everyone in every industry is looking for them, ”said Graham in the report.
IT development was the biggest barrier to full digital mortgage implementation by lenders in 2020, up from # 7 in 2019. Difficulty coordinating technology installation with required training was another barrier that was shared by 82% of the world's population Lender was cited.
Even if internal willingness to use the technology has improved, a certain degree of caution remains.
"When new tools that loan officers have previously trained for hours or days can be run in seconds, some question their role in the process or distrust the outcome," said Graham.
Lenders need to be competitive in recruiting, take the time to better coordinate workflows, and convince their employees of their worth to allay these concerns. To address the last point, lenders can refer to customer service metrics that show individual guidance continues to be valued, according to the Stratmor report.
"We have a lot of data to show that borrowers want someone to guide them through the lending process," said Graham. "You just don't want to wait for her."