More than four out of five mortgage lenders plan to increase spending on automation technology to reduce loan production costs next year, a recent survey shows, and implementing the right technology is their top concern.
About 70% of mortgage lenders report that they expect total loan product costs to continue to rise in 2017, according to the survey conducted by Capsilon Corp. during the Mortgage Bankers Association’s recent Annual Convention and Expo, which took place Oct. 23-26 in Boston.
Surprisingly, only 7% of respondents report that they expect total loan production costs in 2017 to be “somewhat lower” or “significantly lower” than in 2016.
The survey, which polled more than 100 mortgage executives, reveals that more than nine out of 10 are “somewhat interested” or “very interested” in technology that automates key steps along the mortgage loan process.
In addition, about 86% of respondents say they expect to spend more on technology in 2017 versus 2016 to reduce loan production costs by enabling a digital mortgage process.
About 45% of respondents say automating key steps in their companies’ loan production processes is “most important”; 37% say automating both the consumer experience and the loan production process is equally important; and 15% say automating the consumer experience during the application process is most important.
Only 3% say their companies are not planning to enable a digital mortgage process.
“The survey results clearly indicate lenders expect loan production costs to continue to rise, and they are looking to technology to reduce costs with automation,” says Sanjeev Malaney, CEO of Capsilon, in a release. “In developing their digital strategies, lenders are right to focus on automating key steps in the loan production process, as this is where technology can deliver the speed, data integrity and cost savings they need to gain a competitive advantage.”
When asked what issues their companies are most concerned with, 73% of respondents say implementing the right technology; 51% say rising loan production costs; 36% say improving customer experience/customer satisfaction; and 16% say longer loan turn times.
Risk of regulatory penalties, hiring and retaining employees, and complying with the TILA-RESPA Integrated Disclosures rule were each cited by fewer than 10% of respondents.