Some are recording an exponential increase in business — AI Foundry and Blend each reported year-over-year growth of about 400% in March, others reported 300% quarter-over-quarter increases and even 100% monthly jumps from February.
Coronavirus and the
"While there's the demand and need to embrace some of the solutions that allow for better virtual engagement, right now it's unprecedented for lenders on the refi side," said Joe Tyrrell, chief operating officer at Ellie Mae. "They're just trying to keep their head above water and don't necessarily have the capacity to start to adopt new solutions at this time."
AI Foundry, for one, processed several thousand loans a day for its customers since mid-March and Stephen Butler, founder and president, expects that volume to get bigger.
"All of our customers are having record days and record weeks for new applications and for closings. We're getting quite a bit of pleas to come in and help right away," he said. "They've got quite a pipeline, double and sometimes triple where they were a year ago in terms of a loan volume."
However, the exponential growth comes as a double-edge sword for lenders trying to keep their heads above water. Current processes and workforces can't keep up and they need to make sure nothing falls through the cracks.
For lenders to meet demand in the meantime, they need to focus on three things, according to Barry May, Blend's head of customer success: removing all the unqualified or low intent borrowers from the pipeline prior to submittal; triage those leads that are most likely to close based on borrower intent; and reduce all the processing work by eliminating any unnecessary tasks.
All in it together
Offerings like artificial intelligence and machine learning provide avenues to cut through mountains of paperwork and automate mundane tasks. But unless they can be applied or return the investment quickly, they can be viewed as too disruptive and moved to the backburner.
Just as plummeting rates rushed lenders with loan demand, the demand for these out-of-the-box answers rushed vendors. To get on the same page, vendors provided streamlined and turnkey iterations of their offerings.
Ellie Mae revamped Velocify into a basic version called Lead Manager Essential. Black Knight rolled out a preconfigured approach, allowing its customers to add features after it gets the standard technology up and running.
It normally takes up to a year to implement artificial intelligence and train employees, but AI Foundry's new bots only take a few days to deploy.
Bending the learning curve
"We saw onboardings taking two or three months to get a lender from their first transaction to all of their closings going through our platform," King said. "What we've seen is the willingness of the lender to streamline things on their side, to do their part of that process a hell of a lot faster. Most lenders we've brought on in the past month have been ramping up in a matter of weeks."
Tech companies providing open lines of communication help to smooth the learning curve.
Many of the software developers regularly perform stress tests on their own systems, which has allowed them to easily switch gears to working remotely.
"We had our pandemic testing in January, it involved our employees going through scenarios and what we need to do," he said. "Recognizing [the outbreak] was getting significant, we stopped all travel in February. Ongoing communication is really critical. In March we worked on work-from-home models and crisis management team meetings."
Eyeing the future
Taking advantage of the market's existing
"Just as you've seen the daily meeting usage of Zoom go from 10 million to 200 million per day, it's safe to say it's not going back down to 10 million once we come out of this crisis," said Bhat. "We're going to see the same phenomenon in our industry as well. This is the behavior change that can stick. If these capabilities provide value, then it's going to be very natural to expect these things going forward."