When the sudden flood of mortgage refinance activity began overwhelming the market in early March 2020, we knew we needed to be there for our lender partners.
Lenders were not sitting back helplessly, of course. Among the many temporary solutions we heard, several stood out because they were so commonly adopted:
- Ramping up hiring
- When hiring was not possible, calling in staff from across the organization
- As a last-ditch effort, raising rates to slow the number of incoming requests
- Frustratingly for the lenders, accepting a dip in closing time expectations
Unpredictability is a feature of the mortgage market, and lenders do an exceptional job of preparing for a wide array of possible outcomes. Even with the best intentions, however, it’s hard to keep pace with unheard-of activity driven by month after month of new-record-low rates.
Inspired by the valiant effort we saw across the industry, we decided to take action. Our rockstar engineering team quickly developed solutions to triage unqualified or low-intent leads, reveal borrowers with high intent, and reduce processing workloads across the board. We’re proud that despite the increase in loan volume during COVID-19, Blend lenders have reported being able to keep pace without increasing staffing. What started as a short-term crutch may end up being a long-term pathway to increased efficiency.
Framing the mortgage refinance problem through a funnel lens
Building on the conversations we had with lenders in the wake of the initial boom, it became clear that many institutions were facing a funnel problem.
At the top of the funnel, the large number of inbound refinance requests were not being qualified effectively. Although an open and receptive funnel is typically considered to be an ideal state for marketing and sales operations, sometimes too much of a good thing can pose new challenges. Solutions on this front end needed to maximize the efficiency of lead qualification while minimizing the resourcing required to get there.
Even with concentrated effort being devoted to top-of-funnel challenges, many lenders were still facing down-funnel processing challenges, given the sheer number of applications. Greenlighting the most appropriate batches of applicants required heroic manual work, oftentimes by staff pulled in from other teams who had to get up to speed on the process for working with refinances. The solution for this required easy-to-use back end tools to facilitate engagement with the right applications at the right time.
Our team raced to complete five new and/or amended feature sets designed to deliver our existing customers a solution in their time of need.
Top-of-funnel solutions: Triage and remove low-intent, unqualified leads
Feature: Ability for borrower to view rates before submitting an application
Description: This feature presents borrowers an overview of rates at the beginning of the application process. The aim is to deter borrowers who are only “rate shopping” from entering full applications, reducing the number of borrowers who fill out applications with no intention of closing their loan.
Feature: Upfront automated adverse action notice with soft credit
Description: This feature initiates a soft credit pull and presents an opportunity for borrowers to exit the application if their credit is below the threshold, accompanied by an Adverse Action Notice. The aim is to eliminate applications that do not qualify for minimum credit requirements without requiring action from fulfillment teams or impacting applicants’ credit by performing a hard credit pull.
Feature: COVID-19 alert
Description: This feature alerts refinance borrowers who are applying for loans that require a traditional appraisal, communicating that these loan products are currently unavailable due to COVID-19 related restrictions. The aim is to increase transparency with borrowers earlier and automatically, increasing communication with little action required from team members.
Bottom-of-funnel solutions: Reduce processing workflow
Feature: W-2 document flagging
Description: This feature flags incorrect documents uploaded as part of the borrower’s W-2 documentation follow-up step. The aim is to minimize back and forth between loan teams and borrowers.
Feature: Streamlined mortgage refinance application indicator
Description: This feature allows borrowers to indicate whether they have an existing mortgage that is currently serviced by the lender. The aim is to highlight existing customers in processor workflows, facilitating a better customer experience and shorter closing times.
A mortgage platform designed for agility
Blend is a technology partner that can help you navigate change, fast.
Our platform is designed to be adaptable and extensible, meeting the challenges of any market conditions head on. Our team is here to listen and support you no matter what challenges you’re facing.
With such a winning combination of team and tech, you’ll see why over 250 leading financial institutions choose us.