The stress of purchasing a home makes 50% of American homebuyers cry at least once during the process, according to a Zillow survey of 2,000 new homeowners and aspiring buyers.
By streamlining underwriting — a frequent cause of anxiety for homebuyers — mortgage loan officers can prevent tears, earn customer recommendations and strengthen relationships with Realtors® and other referral partners.
Homebuyers have three major complaints about the mortgage process:
- Documentation — Many buyers are irritated by the sheer volume of financial documents they’re asked to provide, especially when asked to re-submit the same documents.
- Takes too long — First-time purchasers, in particular, are frustrated that processing a mortgage takes an average of 47 days (and often longer).
- Lack of responsiveness — When mortgage applicants have an urgent question, many say it’s hard to get a reply from their lender.
The last complaint is being voiced with increasing frequency. According to the latest J.D. Power Mortgage Origination Satisfaction Report, 40% of respondents said their loan representative “should have been more involved,” up from 29% a year earlier.
Effective Communications with Underwriting
In a time of fluctuating interest rates and home prices, many elements of the mortgage process are outside the LO’s control. Underwriting, however, is one area where LOs can help avoid the types of delays and miscommunications that homebuyers find so irritating. With this in mind, here are five strategies Arch MI’s Underwriting team uses to communicate clearly with LOs:
- Be proactive in sharing information via a note or letter regarding borrower circumstances that may help the underwriter better understand the file.
- Include your contact information with each file submission.
- Be clear and concise.
- To clarify issues or concerns, consider when to pick up the phone vs. responding via email multiple times.
- Carefully read emails in their entirety so your response addresses every aspect of the message.
Blaine Rada, Arch MI’s Senior National Trainer, expands on these ideas with “12 Steps to Ensure a Smooth (Mortgage) Transaction” in Arch MI Academy’s on-demand video titled “What Begins Well, Ends Well.” It’s well worth your time to watch the entire hour-long video, but the sections on the loan application and setting buyer expectations are especially relevant here.
Rada says some LOs don’t spend enough time at the beginning stage — with a Form 1003 mortgage application, for example, “It’s best to put time and effort at the beginning of the transaction, but there is a tendency to do the opposite,” he says. “One of the reasons for this is borrowers are pushing us to move quickly to get things done fast. They’re impatient, and they don’t understand the process.”
Setting expectations early in the process helps avoid unwelcome surprises, says Rada, a 30-year mortgage industry veteran who has worked as a loan officer, processor and underwriter. He believes LOs often avoid talking about long timelines at the outset because it’s a message impatient buyers don’t like to hear. “At the end, they’ll respect me or the fact that things went the way I said rather than me telling them the things they want to hear,” Rada says.
In addition to the video on ensuring a smooth mortgage transaction, Arch MI Academy offers dozens of live and on-demand webinars to help lenders learn key skills, techniques and best practices to help mortgage teams build confidence and grow originations.
Other Arch MI resources for LOs include our ASK Center, which is staffed by underwriting experts who can answer your hardest questions about mortgage insurance on loans. Get direct access to our MI underwriting experts and personalized scenario analysis, then finalize your loan applications with confidence. Send us your questions, and you’ll get our answer in one hour or less. You can also view video answers to our more frequently asked questions.
When questions arise about a specific file, you can contact your Account Manager or the UW Customer Service Team.
Tell us about your successful strategies for improving communications with underwriters, and we may use your input in a future Insights post on this topic. We look forward to hearing from you.