Frustration around mortgage applications
And it’s mostly the consumer who feels the pain. When you’re buying a home, you want a quick answer: can I finance this property? Right now, inefficient processes in the mortgage chain lead to longer turnaround times, and that often means waiting too long for certainty. There’s still far too much paperwork involved, and the systems used by intermediaries and lenders are rigid and poorly aligned. If data is expected but not requested properly, the application can’t be assessed, and you’re right back at where you started. That causes frustration not only for consumers, but also for intermediaries who want to give their clients the best possible service.
Towards an optimized mortgage chain
Let’s start with the good news: things can be done differently. When parties, the used systems, and developments in the mortgage chain are well aligned:
- Quality improves, increasing the first-time-right (FTR) rate
- The overall turnaround time speeds up, from application to final approval
- Conversion rises, and lenders experience fewer dropouts
- Trust in both intermediaries and lenders grows
- Consumers enjoy a smoother experience, at both the intermediary and the lender
What needs to happen?
As a lender, you need to take a ‘deep dive’ into your processes. What are the causes of dropout and delays? Are your products well-positioned within intermediary platforms? Are the latest developments reflected in your HDN schemas? Are your business rules, product terms, and acceptance criteria properly aligned across advisory tools, comparison engines, and HDN standards? And just as important: who inside your organization is responsible for managing this alignment? It’s essential to ensure that intermediary software packages connect seamlessly with your desired HDN data and with the mid-office processes from the mortgage lender, so the entire flow functions optimally.
Quick wins…
There are definitely ways to make mortgage processing faster, smarter, and easier. Evaluate the information you’re asking for assessment in the application critically. Are all documents requested from the consumer really necessary at that point in the process? Often, the mindset is: “better to ask too much than too little.” But that creates friction. Another quick win? Appoint a chain coordinator: someone who understands the housing chain from broker to notary, both functionally and technically. Someone who can sit at the table on behalf of the lender with software providers and HDN to identify improvements. This role also ensures product terms are implemented correctly across the chain and that any product changes are rolled out consistently. Finally, the advise is to make sure that product terms and acceptance criteria are regularly aligned, especially after changes, and tested together with all chain partners. That’s what leads to clarity, efficiency, and quicker certainty for consumers.
…and opportunities for the long-run
Consumers need to provide the same documents multiple times to different parties, such as a copy of their ID for the broker, the lender, and the notary. That’s frustrating and inefficient. However, much of this data is already digitally available, for instance through MijnOverheid or the UWV, and can be shared with others directly. By switching to source data instead of requesting documents, you save time and ensure that everyone in the chain uses the same consistent information. With over 60 market parties having already signed the source data covenant, the time is now to leave the paper process behind. And there’s more on the horizon. The arrival of Digital Wallets, Europe’s solution for digital identity, brings even more opportunities to make the mortgage process easier and safer for consumers. With a smart application process, source data integration, and a high level of trust in that data across the market, mortgage processing becomes more efficient. And that means consumers get faster clarity on their home financing, which after all is what it’s all about.
Do you want to learn more about what process optimization or how the use or source data can benefit your organization? Get in touch with us.
