Navigating the future begins with technology
In the digital age, the financial sector, specifically the mortgage industry, is witnessing a shift towards digital transformation. This evolution is not a mere trend but a necessary adaptation to meet the growing consumer demand for efficiency, precision, and speed in financial transactions.
Recent research by Fannie Mae highlights that although many consumers increasingly lean towards digital methods for convenience and speed, mortgage lenders need to catch up and adopt digital verification tools to meet these expectations.
Delving Deeper Into Fannie Mae’s Research
Fannie Mae’s research reveals a profound disconnect that undermines the mortgage lending industry’s efficiency. The data portrays an industry tethered to outdated, manual processes that are time-consuming and prone to inaccuracies. The research also emphasizes the clear preference among loan applicants for digital transactions, underscoring the need for lenders to shift to a more digital approach.
The slow embrace of digital solutions starkly contrasts with the digital proficiencies that contemporary consumers have come to expect in all facets of their lives, including financial transactions.
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Critical Insights From the Study
A commanding 90% of loan homebuyers prefer a more-digital or fully digital mortgage process. Despite this preference, 65% of homebuyers were not asked to verify their income and employment status digitally.
Most recent homebuyers cite shortening the process of getting a mortgage (75%), making the process easier (71%), and reducing paper use (59%) as the top benefits of a digital mortgage process in 2024
These findings serve as a crucial wake-up call for the industry, indicating a significant gap between consumer expectations and the current capabilities of most lenders.
The Path Forward: Embracing Digital Verification
The research by Fannie Mae further highlights the need to embrace digital transformation in all aspects of the mortgage lending process, especially in verifications. Digital verification tools offer unparalleled benefits such as:
90%
The number of homebuyers that prefer a more-digital or fully digital mortgage process
- Efficiency and Speed: Automating the verification process drastically reduces the waiting time for loan approval, directly aligning with consumer expectations for quick service.
- Accuracy and Reliability: Digital tools minimize human error, ensuring the verification process’s accuracy and increasing reliability.
- Improved Customer Experience: The seamless integration of digital transactions into the mortgage process dramatically enhances customer experience, fostering trust and satisfaction.
Lenders can meet and exceed their clients’ evolving expectations by prioritizing digital transformation. Lenders who recognize and act on this desire from consumers can redefine the industry standards, offering efficient, reliable, and customer-centric services.
Set Up to Effectively Enhance Digital Mortgage Lending
To address the gap between consumer expectations for digital transactions and the current practices in the mortgage lending industry, specific tools and solutions stand out for their ability to bridge this divide efficiently.
Among these, the AutomatIQ Borrower’s Verification of Employment/Income (VOE/I) and the 4506-C Borrower Assisted products are pioneering solutions designed to streamline and digitize the mortgage application process. These tools are instrumental in offering consumers the desired digital experience that was underscored in Fannie Mae’s research.
The AutomatIQ Borrower Verification of Employment and Income (VOE/I) is engineered to optimize employment and income verification, transitioning this traditionally manual and error-prone process into a more streamlined and automated operation. Consumers benefit from a much more expedited and smoother application process, that accelerates loan processing times, reduces the margin for error, and increases the overall reliability of verifications.
The AutomatIQ Borrower 4506-C Borrower-Assisted solution innovates income verification by enabling a digital route for borrowers to authorize access to their IRS tax return information using an API. This move accelerates the verification process and prioritizes privacy and accuracy by ensuring direct and secure tax data retrieval. This solution addresses one of the more time-consuming aspects of mortgage applications to significantly elevate the borrower’s experience.
By adopting these forward-thinking digital tools, lenders can significantly improve their service offerings and progress toward the sort of digital mortgage lending landscape outlined by Fannie Mae’s findings.
CoreLogic’s solutions not only meet the digital expectations of today’s consumers but also fits into a future where the mortgage application process is characterized by efficiency, accuracy, and enhanced customer satisfaction.
Integrating digital solutions such as AutomatIQ Borrower VOE/I and 4506-C Borrower Assisted into mortgage lending processes provides a clear path for lenders to enhance their offerings, streamline their operations, and significantly improve the customer experience. In an industry ripe for digital transformation, such innovations are beneficial and essential for any lender aiming to thrive in the digital mortgage lending age.
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