Moving Mortgages Into The Mobile Era

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 mortgage 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 too far behind the financial eight ball to ever be serious real estate investors.

Some people blamed eating way too much avocado toast.

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 that they have an annoying habit of being hard to predict in the long term. Millennials – particularly older ones who are now much closer to 40 than 20 – have turned out to be 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 a frugal generation that realizes that a mortgage with tax payments and insurance included is still much lower than paying rent, especially in desirable markets,” she said. “They are becoming homebuyers.”

And quickly. And Caliber knows mortgages: They are the fourth largest non-bank mortgage lender in the U.S., and mortgages are their main financial service. A little over 70 percent of the mortgages are purchase mortgages, with refinancing comprising 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 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 to create 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,” noted Watteeuw.

That doesn’t mean customers simply need the entire mortgage buying experience digitized and automated. Far from it, Watteeuw noted: The network of 1,500 loan officers that makes up Caliber’s sales network are the intellectual property that keep the firm going. Mortgages, she pointed out, are complicated products that require precision, and even the most evolved millennial on Earth is still 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, that 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 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 loan officers to stay constantly wired to the progress of the mortgage product – and to remain ever accessible to the customer who is going through the process.

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

The loan officer is always just a few taps away from a client file, instead of having to rely on a hybrid of phone and 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 just communicate by document exchanges. H2O is designed to tap into the most useful potential of mobile in the mortgage process: putting the loan officer always in reach, without having to feel as though they are ever present.

Similar logic 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

By nature, buying a house is a complicated – and intimidating – process for any customer, but particularly for a millennial first-timer.

Some elements are just a reality of the process: There will generally be a lot of verification required, many 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 ensures the process is well-governed and that good loans are underwritten.

But, Watteeuw noted, by using mobile to better connect the mortgage underwriting and, later, the management process, a lot of the friction that adds time and complexity to the process can be removed. And by something as simple, she noted, as tying all parties to the same backend, so that the process and the requirements are entirely clear to everyone involved.

“This is really a powerful interaction between these mobile apps and the backend,” she pointed out. “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.”