Mastering Mortgage Tech Adoption: Internal Alignment to Execution

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Hi, everyone. I'm excited to jump into today's webinar. Welcome. My name is Allison Laforgia. I'm the managing editor of the content studio at HousingWire. Today. Our topic is Key Lessons for Transformational Procurement and Adoption, hosted by Truve. Before we jump into content, a few housekeeping items. We will be having a Q and A session at the end of today's webinar. This is meant to be interactive, so please drop any questions that you have for our panelists in the Q and A or in the chat. Now, you can submit questions at any time, so drop them there and we'll make sure that we get back to them at the end of the webinar. Today's content will be led by Richard Kreiser, who is the VP of Marketing at truv. Richard, take us through today's webinar.

My name is Richard Greaser and we are very, very blessed to have my fellow panelist here. He's a customer of ours and just to become a good friend through this process, Juliet LeBon. Yeah, and we're going to get into this. Just to start off, in case you don't know where you are, we are here to talk about key lessons for transformational procurement and adoption. And, and you know, if you're here for that, great. Let's move on. I'm going to give a quick introduction to myself. I'm Richard Greaser, VP of Marketing at truv, and we put these, these thought leadership webinars on to add value back to the mortgage market. Juliet LeBon, thank you for joining me, Senior Director of Operations and Strategic Partnerships at Better Mortgage. Julia, why don't you tell people a little bit about yourself and a little bit about better.

Okay, great. Happy to. I am focused on sourcing vendors and technology that enable BETTER to automate workflows that enhance operational processes. So I'm reinforcing our commitment to cost effective cost efficiencies and tailoring solutions to the needs of customers. Optimizing the technology and cost of loan originating loans, especially for a product like a heloc, where speed and accuracy are critical, is a complex challenge. I came across a case study of truv, which provides consumer permissions, income and employment verification and thought it could be a value addition to our verification workflow Waterfall.

Cool. Juliet's awesome. She's a great person. So thank you so much for joining us.

Thanks for having me.

Well, I mean, you're giving back to the industry and it's really good of you to do that. Thank you so I'm going to start off and just talk about it on a macro level. We all know where the forecasts are looking. You can see Fannie Mae, Mortgage Bankers Association, Wells Fargo, you can see their forecast on what it looks like for the next couple quarters. Looks like by the end of Q4, 2025, people are predicting around 6% for a 30 year fixed mortgage. But I think, and I think most people are aware that, you know, the difference between a 3% and a 7% mortgage is roughly like an additional thousand dollars on a monthly payment for your typical home loan. So you're probably not going to see the massive refinance waves at the 6% level, I think. But I think what the big takeaway on what we're trying to share with you here on the slide is that from 2019 to 2024, home equity jumped from nineteen and a half trillion dollars to $33.8 trillion. Right. That's 73% increase, a massive increase. And so the opportunity lies in home equity in terms of paying credit card debt or you want to do a remodel on a house. And it is a focus of Better. So I'm going to ask Juliet, do you want to tell me a little bit about that?

Sure. So Better offers a fast, fully digital HELOC and Helo product that simplifies the process for homeowners. So our applications take less than three minutes and we're closing these loans in days, not weeks. So validating income and employment quickly is essential. Additionally, given the tight margins on originating loans and the significant impact that vendor spending can have on profitability, it's crucial to manage our costs while maintaining efficiency and service quality. This is one of the reasons why we chose to partner with Troop.

Well, we value as a partner, Julia. And thank you for, thank you for that overview. So just in case, you know, the, the cat's out of the bag everybody. This is a lot of the topic here. We'll be talking about identifying an opportunity, picking a solution. And that solution will probably is focused on HELOCs. So we'll be talking about that specifically here. Let's keep going. A little bit more industry data I'm sharing, you know, for the, for the last two years, I am the average IMB NBA puts out this statistic, but the average IMB has been underwater on a per loan basis in terms of profitability. It's been in under water in the over a thousand dollars. By over a thousand dollars. Q1 got a little bit better and then Q2, we just had the data came out and it's $693 profit profitable per loan. There's a lot of different reasons for that. So while a lot of folks might celebrate celebrate that dollar amount, I think that there are still some headwinds that a lot of lenders are facing. And I was just at tmc, the Mortgage Collaboratives Conference and one of the main gripes and focuses for the organization is to reduce the cost of verification for income and employment. This is on the lips of a lot of, lot of different lenders. So I mean if in case anybody in the audience isn't aware, traditional providers are charging $55 to $70 per pull for, to verify income and employment. And if you have a, if you, you have to do that twice, right, you have to do that at application and then 10 days before close. And if you have a co borrower that can be $280 per application and let's say you fat finger it, it could even go up higher if you're a processor, underwriter, whoever is doing it on the back end. So we've seen them as, as high as $500 per loan. And so a new, new technologies have come about recently, several years back, consumer permission platforms, open banking, you probably have heard of this before. TRUV is one of those providers and they're 80% less cost than the incumbent and the traditional providers. And the key there is that the consumer is giving explicit consent to pull their data from their payroll provider or their bank to do the verification of income, employment or assets in the case of banks. So I want to run a poll right now, Allison, if you don't mind kicking off that poll. And I want to just ask the audience right now, like you know, are you currently using or do you plan to use a consumer permission solution? It doesn't have to be true if it can be any, any of the solutions that are consumer permissioned for VOIE or VOA in 2024. And Allison, I'll trust you to let me know when that's reached a quorum. We'll probably give that, I don't know, 30 more seconds. You know, the last time I ran this poll was in a webinar I, I did earlier this year around February. And the answer, I think a hundred percent actually was slightly different. 100 of the of the respondents said they planned to use one, which was really interesting. 50% of the respondents said they were using one. So it's interesting. I'll be, it'll be interesting to see where this comes back, Allison. You can call it whenever you want? Yeah, close. Looks like 67% are currently or plan to use a consumer permissions solution for voie or voa in 2024. Juliet, what do you think?

I, I think that makes sense. I, I, I think that number is going to go up over time. I think these solutions are proving to be really valuable.

Yeah, I think the market is creating, you know, I think the, the price trends and the increasing cost is creating the opportunity. Although the, the value, there are other types of value that we'll get into. Um, let's keep going. So let's start off right here. This is the meat and potatoes. Let's talk about the opportunity. Juliet, why did Better choose Truth?

Yeah, I mean a lot of things that, that you mentioned there. But you know, the market for instant validation of the stated income and employment is, is as everybody knows, it's cornered by a few players and over the years they've intentionally and incrementally made that extremely expensive. They often make you pay separately for verification of income and employment and they charge for re verification of data and charge you for data that you may not need, like inactive employment. So this market for this consumer permission verification services is growing. I think it's driven by the increasing demand for more secure, efficient and client centric methods of verifying identity, income and other personal information. So unlike traditional verification processes which generally rely on third party sources, it may not always involve direct borrower consent. These consumer permission services allow individuals to control and authorize access to their personal information. So with True, we talked about this, it's a consumer permission, it empowers clients to give explicit permission before their data is shared and verified. Borrowers have various levels of comfort logging into their employment account through Better's proprietary an origination platform which we call Tinman. So in discussing the integration of this new technology, we really had to discuss what success looks like. You know, if we could get 30 or 35% of customers to use their credentials to log into Troove at what I would say is a 90% cost savings, is that successful? And I would argue, yeah, you know, customers come to Better because they want a digital experience. They have, we have our homegrown Los Tin man. And True integrates very seamlessly into our automated workflows. So True's technology is known for its accuracy in retrieving and verifying data. And so for better ensuring the accuracy of verification data is critical to maintaining the integrity of our processes and our decisions.

Yeah, so that, what I love is you're hitting really the value propositions that got Your ideas attention and, and your team's attention. And it's more than just cost, right? It's accuracy of data upfront early in, direct from source upfront early in the process comes with reps and warrants from both of the GSEs. And what I think the next step is typically, and this is why the question is where I'm about to tee up here is, you know, what are those deciding factor, what were better's deciding factors in, in choosing Troop? You touched on a couple of them. You want to expand any more, Juliet? Sure.

I think, you know, the partnership with Trub, you know, the onboarding felt like a really true partnership. You know, you took the time to really understand our specific needs and tailored the solutions accordingly. So veterans deciding factors in choosing Troop was cost was one, but also coverage and customer service. So true. Pay as you go model where you only pay for what you use is a real departure from the norm and can be a game changer in managing costs effectively. You know, I love creating solutions and thinking outside of the box to get solutions that work for both parties. It's the partners that are willing to test and learn with us over time that work the best for us. We look for partners that like to push the boundaries of what's possible and then grow with us over time. As part of the onboarding process, part of the vetting process, I bumped the employers of all of better 20, 23 and 24 consumers against the Truv database and got a 99.9% hit rate. So the coverage was there. You know, in my experience with other vendors, they often have dated information or the coverage is sporadic. And, you know, it just makes sense to put TRUV in the waterfall and we can still use other vendors further down the line as necessary.

That's, that's awesome. In case anybody's wondering what Julia was talking about, it's taking usually the previous several months loans that you've closed and finding the employers from those in those loans and matching them against our database to match up who we integrate who, who we integrate with and who we can pull the verification of income from. And so 99% is incredible. And so, but let's, let's, let's jump on. We talk, we talked about cost and conversion. Sounds like you, you, you, you were sold and maybe some of your team was sold. But, you know, at a lot of the conferences I'm going to, the panels are centered around like change management. And part of that change management is in the procurement process. And how do you get people on Board, you know, so how do you get people on board? How did you get buy in for truv?

It wasn't easy. Gaining buy in for a new solution like True, particularly in a, you know, cost sensitive and fast paced environment, required a deliberate approach that addressed various stakeholders, concerns and highlights of the solutions benefit. We had previously integrated with a consumer permission vendor for asset verification and it had some challenges. So the integration with truth technology was seamless. You know, so putting myself in the shoes of a customer and focusing on their experience is crucial to today's digital and client centric market. Communication and transparency help to effectively manage expectations and drive incremental gains. You know, I'd argue that incremental gains are valuable. I don't need a 90 or 100% conversion rate to say a pilot is successful. If we aim for, you know, to drive adoption over time, we're more likely to see success. HELOC is a great place to start with True. I mentioned it earlier. We need data quickly with HELOCs, we're closing these in just a few days. And when consumers are motivated to get us their documentation quickly, they may be open to consumer permission access or consumer permission type of tools. The data passed from True via the API allows our underwriters to have the documents they require to verify income and employment and we can reconfirm before closing to validate if anything has changed. You know, in an environment where every dollar counts, focusing on cost optimization and revenue enhancement is essential for sustain, sustaining profitability and achieving long term success. So that was kind of the angle I took here to push this over the finish line.

Yeah, I love it. And you know, it's amazing that your HELOCs are closing in a matter of days. I mean to improve there you're. You start counting the minutes, right?

Exactly.

Well, all right, so, so I think you've built the business case, you've got buy in from the organization. Usually the next step is, okay, after you sign the contract, what's going to be the plan to, to drive adoption? Right. Because this is typically where a lot of companies who don't have this kind of a good plan built run into hurdles with new technologies. Right. It's one thing to have a great business case and it's another thing to have a plan that's going to get you to, you know, a good level of adoption and success. Julia, you want to, you want to talk to me a little bit about that?

Sure. So you know, better is a tech company first and in the spirit of modernization and innovation, you know, I've done dozens of successful pilots with tech companies like True to really streamline and automate various processes of the, of the origination process, various pieces of it. So if you're gonna, if you're gonna get digital, you're only as fast as your slowest sub process. So for Helix Heloc, you know, for example, we're using, we're using an AVM for value and we're using satellite imagery and, and artificial intelligence to validate property conditions. So the technology we've implemented allows us to form an evaluation within minutes for 70 to 75% of our HELOCs. We think about how these opportunities come together like automating income validation. Yeah, it's about speed, but it's also about reduction or elimination of pain points that cause friction or bad customer experience. So we put the customer in control. So here at Better we're pushing the boundaries with companies and technology and products like True that allow us to enforce change, disrupt the status quo and really make the home ownership business more accessible for everybody. So that's how we drive it.

I love it. I mean from True's perspective when we work with a client and this is typically best practice with like the best SaaS companies that are out there, there's a lot of training and adoption for the team that goes into it. Right. And, and also creating collateral that is borrower facing. Right. Explaining the value to the borrower and why they're doing this, why, why do this in the application and the benefits to them. So cool. I think that is, that is it for our questions. This is a shorter webinar. Does anybody. Yeah, we have some questions. If you have any questions, throw them into the chat right now and I'm going to go through the ones that I've got, I've got in actually the question module first. The first, the first one is I think some borrowers would be hesitant to do this. That's a common thing we hear over here at Truth. It's a different thing. So the person's asking, what percentage of borrowers do you see verify successfully? Well, the first thing I would say, Julian, I'm going to take that answer if you don't mind because that's more of a, I think that's more of a Truth question. Typically the percentage of borrowers varies client by clients. I can't throw a percentage out but I will say it's industry leading amongst different consumer, amongst different providers for verification of income and employment. I will talk about real briefly about borrower, Borrower hesitation to complete this and say that, you know, open banking and consumer permission solutions have been around for actually a long time. Back when Mint started. I mean, that's. That's a long time. That's like 20 years almost. Mint really car paved the way. You've got all kinds of different, other vendors that are in the space and doing it very successfully. So, yeah, this really is the, I think, the way of the future. Next question I've got is, how long does it take to implement and what technologies are you integrated with? Julia, I'm going to let you do how long does it take to implement? And.

Yeah, yeah, sure. I think, you know, it takes as long as it takes to get it prioritized on our roadmap. So I think the nice thing about TRUV is that the technology is actually fairly straightforward to implement. It was more, for me about slotting it in and getting it prioritized. But, you know, our focus on cost savings was a major driver of prioritizing. So our focus on cost savings and customer experience is. Is. Is above all.

Yeah, so I love that you brought up prioritization because every lender that we talk to has a whole laundry list of priorities for different technologies that they're. Or. Or just different, you know, that things that are taking on their capacity for development or improvement, you know, and getting into that priority list. Cost is probably a big one. Right. Like savings for the organization that can bump it up. But things, you know, when you're ripping and replacing an los, for example, that's a huge move. And sometimes you have to stack up, you know, putting in a new form of verification versus putting in a new los. And we can help with that too. If, if you want to talk about that, whoever's asking that question and what technologies are you integrated with? We integrate with the majority of the pos's and LOS of the world. So, like the major players out there, we integrate with. I can name a couple. I can say Encino. We integrate with enCompass. We're launching Linderlogix, Flowify, Be Smarty. We're integrating with Byte, and that'll be announced very shortly. I believe Blue Sage as follows. Just reach out if you want to make sure that your LOS or POS is. Is covered. Next question I've got here, Juliet, is do you face hesitancy or adoption challenges with loan officers or staff? I can answer that, but I think you're probably better suited. I think that's. To you.

Yeah. I mean, I don't mean to sound like a broken record, but better as a tech company first. So While adoption to new tools can sometimes be difficult, it's in our DNA. So we work through these challenges. Loan officers and staff, they may be accustomed to their current system and processes and so introducing a new tool often requires them to adjust their workflow, which can lead to resistance. New software typically comes with a learning curve. So we make sure everybody understands the project tangible benefits and we drive adoption incrementally. But more importantly, we believe the future lies in the uberization of the loan officer, giving them leads generated by 10 men, our LOS and having them be more productive. So we're also testing a variety of applications of AI within Tinman which is and for both internal efficiency and consumer facing benefits. We're seeing early indications from these AI programs investment geared towards sales and underwriting productivity, specifically around customer routing, data capture and initial underwriting review of loan files. So Tinman's capable of completing the entire initial underwriting fully autonomously and that will help us to drive customer conversion and operational efficiency at scale. So another way to think about it is the LOS don't have to care about true. If it's all happening autonomously, it's all happening behind the scenes. So there's not really a that much friction there.

Yeah, for sure. That's a great answer, Juliet. I think for the way I would what I throw out there is like a lot of our most successful customers, especially the ones with RE that are retail focused, will find a small pilot group and get a lot of success. And I think that's kind of what you're doing with heloc, honestly. They'll get a pilot group, get some success and then make them the poster child that they show to the organization and say hey, look at the success that this branch or this loan hyper top producing loan officer is having using truv. And then that becomes the model to roll out for the rest of the organization. That's, that's what I've seen work really successfully. I think that's all for, for questions for now. Juliet. I just want to thank you so much for, for joining us. This has been a real pleasure and Allison, thanks for having us.

Happy to be here. Thanks.

Absolutely. We came to the end of today's webinar. For anyone who has any more information, we will be posting a bunch of links on the webinar page for next steps. Just sharing the resources that Richard showed on that last slide. We will also be sending a recording of today's webinar early next week. Thank you all for joining us. We'll see you all again soon.