Record volume during pandemic shifts industry
to increased digital mortgage focus
ICE Mortgage Technology™, part of Intercontinental Exchange,
Inc. (NYSE: ICE), a leading global provider of data, technology and
market infrastructure, today shared that this past year borrowers
took advantage of historically low interest rates and the mortgage
industry embraced digital mortgages more than ever before.
According to ICE Mortgage Technology’s™ latest Borrower and Lender
Insights Survey, the pandemic has permanently changed the way
consumers utilize technology and those looking to buy or refinance
a home are seeking lenders who offer online tools to complete their
mortgage loans from home.
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The overwhelming majority (90%) of lenders believe that
technology can help improve the mortgage application process,
citing benefits that include simplifying the entire process (74%),
reducing time to close (70%) and minimizing data entry (67%).
“Last year brought our industry a perfect storm,” said Joe
Tyrrell, President, ICE Mortgage Technology. “You not only had
COVID, which required lenders to shift to virtual workforces, but
you also had to conduct business in a safe and socially distanced
way with borrowers; at the same time we were experiencing a
historical increase in loan volume. This caused many lenders to
reevaluate their technology partners, how they were leveraging
technology, the systems that they employed, and the tools that they
relied on. We heard many stories from our lenders across the
country that had to completely and permanently shift the way they
served borrowers.”
Importance of digital solutions on the rise
According to the survey, the importance of lenders offering
digital solutions such as online applications during the lending
process increased for borrowers in 2020, with 58% saying the
availability of an online application would likely impact their
lender decision (up from 50% in 2018*). While still important, the
offering of a mobile app specifically was less likely to influence
borrowers’ lender selection, with 47% saying availability of one
would factor into their decision in 2020 (compared to 40% in
2018).
Homeowners who used an online application appreciated the
simpler application process (55%), reduced time to close (53%) and
resulted in fewer in-person interactions (49%). Not surprisingly,
decreased in-person interactions grew in importance in 2020, as
just 37% of consumers in 2018 cited ‘no need to meet in person’ as
something they liked about their online application process.
Whether they had been through the mortgage loan process or not, 64%
of consumers surveyed believe that an online mortgage process would
make buying a home or refinancing easier than an in-person
process.
“From a borrower’s perspective, the pandemic has accelerated the
demand for a consistent, digital first borrowing experience,” said
Tyrrell. “Signing documents electronically is quickly becoming the
minimum, and borrowers expect a seamless experience from start to
finish. In 2020, many lenders cobbled together different solutions
to meet borrower demands, but that often led to a more confusing,
fragmented process. COVID highlighted the need for a single
consistent digital experience for borrowers.”
Currently, online applications and online portals are the
digital tools most offered among lenders, with more than nine in 10
offering both options to borrowers (91%) respectively. Of lenders
who offer online applications, 60% said more than half of all loan
applications are submitted online, while 38% said more than 80% of
their applications were completed online in 2020. However,
traditional loan application methods may be more common at larger
organizations. Half of large institutional lenders, or those with
200 or more employees, indicated that less than 50% of their loan
applications were submitted online.
Borrower respondents who were offered online and/or mobile
options by their lenders took advantage of those tools during the
mortgage loan process. 61% of borrowers used an online application
in 2020, slightly up from 58% in 2018. 61% also used an online
portal for electronically signing and notarizing documents,
compared to 56% in 2018.
Borrowers, lenders agree on amount of communication, but not
necessarily the channel
Responses from borrowers also revealed opportunities throughout
the mortgage application process for better alignment,
understanding and service on the lender’s part. Specifically,
borrowers and lenders had differing views on the time needed to
fill out a loan application and the method used for ongoing
communication with borrowers. However, lenders and borrowers tended
to agree on the right amount of communication to be used throughout
the mortgage loan process.
Additional insights included:
- Nearly nine in 10 lenders (86%) said borrowers should spend
less than 30 minutes filling out a loan application, but 68% of
borrowers said they actually spent 30 minutes or more completing
their application.
- The majority of lenders (72%) felt borrowers were satisfied
with the amount of communication from them. More than half of
lenders (74.8%) said they contacted borrowers at least once per
week to update them on the status of their loan after the
application was filed. Borrowers shared this sentiment, as 77% said
they had “just the right amount of contact” with their lender this
past year.
- If they were to apply for a new mortgage within the next year,
borrowers would most appreciate interacting with their lender
through an equal blend of traditional and digital methods (26%),
closely followed by interactions that have a more traditional focus
(e.g., telephone) (25%) and purely traditional interactions (e.g.,
in-person) (24%).
- Homeowners who used an online application appreciated the
simpler application process (55%), reduced time to close (53%) and
fewer in-person interactions (49%) – a significant rise due to the
pandemic. In 2018, only 37% of consumers cited ‘No need to meet in
person’ as something they liked about their online application
process.
“We recently launched Encompass® eClose for our customers and
it’s a prime example of how the industry is viewing technology
moving forward,” said Nancy Alley, Vice President of product
strategy, ICE Mortgage Technology. “Due to the large scale of
volume happening and an increase in consumer demand and
expectations, a number of lenders in 2020 had to piece together
different electronic closing solutions to keep up. The survey
results completely align with the growing need for one consistent
and seamless automated platform that connects borrowers to lenders
all the way to e-signing, and saves lenders time and money along
the way.”
To download the ICE Mortgage Technology Borrower and Lender
Insights Survey eBook, and for more information, visit:
https://www.icemortgagetechnology.com/resources/collateral/ebook-borrower-insights-survey-2020.
ICE Mortgage Technology combines technology, data and expertise
to automate the entire mortgage process from consumer engagement
through loan registration and every step and task in between. ICE
Mortgage Technology is the leading cloud-based loan origination
platform provider for the mortgage industry with solutions that
enable lenders to originate more loans, lower origination costs,
and reduce the time to close, all while ensuring the highest levels
of compliance, quality, and efficiency. Visit
icemortgagetechnology.com or call (877) 355-4362 to learn more.
Methodology
ICE Mortgage Technology surveyed approximately 2,000 individuals
ages 18+ in the US who have taken out a mortgage loan within the
last five years or are currently renting and 147 U.S. mortgage
lenders. The surveys were fielded using the Qualtrics Platform, and
the panels were sourced from an owned list of ICE Mortgage
Technology customers for the Lender Insights Survey and from Lucid
for the Borrower Insights Survey. Fielding was executed in December
2020 and January 2021.
2018 data is in reference to a November 2018 survey of 2,106
U.S. individuals 18 and older (both male and female) who had taken
out a mortgage loan within the prior five years or were renting at
the time. The survey was fielded using the Qualtrics Insight
Platform, and the panel was sourced from Fulcrum by Lucid.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500
company that designs, builds and operates digital networks to
connect people to opportunity. We provide financial technology and
data services across major asset classes that offer our customers
access to mission-critical workflow tools that increase
transparency and operational efficiencies. We operate exchanges,
including the New York Stock Exchange, and clearing houses that
help people invest, raise capital and manage risk across multiple
asset classes. Our comprehensive fixed income data services and
execution capabilities provide information, analytics and platforms
that help our customers capitalize on opportunities and operate
more efficiently. At ICE Mortgage Technology, we are transforming
and digitizing the U.S. residential mortgage process, from consumer
engagement through loan registration. Together, we transform,
streamline and automate industries to connect our customers to
opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual
property rights of Intercontinental Exchange, Inc. and/or its
affiliates is located here. Key Information Documents for certain
products covered by the EU Packaged Retail and Insurance-based
Investment Products Regulation can be accessed on the relevant
exchange website under the heading “Key Information Documents
(KIDS).”
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995 -- Statements in this press release regarding
ICE's business that are not historical facts are "forward-looking
statements" that involve risks and uncertainties. For a discussion
of additional risks and uncertainties, which could cause actual
results to differ from those contained in the forward-looking
statements, see ICE's Securities and Exchange Commission (SEC)
filings, including, but not limited to, the risk factors in ICE's
Annual Report on Form 10-K for the year ended December 31, 2020, as
filed with the SEC on February 4, 2021.
© 2021 ICE Mortgage Technology, Inc. All rights reserved.
Encompass® and the ICE Mortgage Technology logo are trademarks of
the entities of ICE Mortgage Technology, Inc.
Source: Intercontinental Exchange
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version on businesswire.com: https://www.businesswire.com/news/home/20210513005319/en/
Sara Holtz ICE Mortgage Technology (925) 227-2193
sara.holtz@ice.com
Jenny Gendron ICE Mortgage Technology (925) 227-3490
jenny.gendron@ice.com
Alexandra Gardell Kreuter Allison+Partners (646) 428-0618
ICEMortgageTechnology@allisonpr.com
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