There’s no denying it’s a new world for mortgage clients and that to keep clients satisfied and engaged—and cultivate them as future business sources—managing expectations is the key.
It’s Not You or Them…It’s the Regulations
Recent surveys on mortgage services indicate that borrowers feel they need help and guidance, especially early in the application process. An area where they may need the most guidance is with the documentation requirements.
Here, you may want to set expectations with your clients early and repeat them often. After years of low-document mortgages and refinancings—and today’s ability to conduct business with a single click in most other areas of their lives—clients could be taken aback by such an intense experience.
To avoid having your clients associate the rigor of income verification with you or your firm, it helps to show empathy and to provide some context behind the requests. This way they understand better that it isn’t you, your firm or something in their credit history, but the new norm.
Everyone Seems to Like More Transparency
As cumbersome as the documentation process is, borrowers actually appear pretty tolerant when it comes to TILA-RESPA Integrated Disclosure Rule Implementation (TRID). A recent survey found the new disclosure requirements are accomplishing their goal: More borrowers are reading their disclosure and closing documents than pre-TRID. The survey found 92 percent now read them versus 74 percent in the past.
Although borrowers are reading the documents, closing on schedule persists as an issue. The same survey found over 20 percent of closings are still delayed.
CFPB Has Sharpened Its Pencil
To help address the delays, the Consumer Financial Protection Bureau (CFPB) issued 293 pages of proposed amendments to the federal disclosure requirements under the Truth in Lending Act in late July (the comment period will remain open until Oct. 18, 2016). The tweaks are intended to improve lenders’ ability to close more loans for their clients with a lessened likelihood for errors and delays, improving overall consumer satisfaction.
Once finalized, these changes should also help with the “black hole” issue involving a borrower who delays the closing date after the final closing disclosure is made, which then forces a lender to assume financial responsibility for the additional costs. If the changes are adapted as is, the closing disclosure will be used to indicate adjustments to the cost instead of issuing a revised estimate.
As these changes usher in a smoother closing process, it should help you keep your clients’ expectations aligned with the new regulatory reality. In turn, that should help keep satisfaction levels trending higher, and online service reviews complimentary.