Avoid these mortgage lending process issues to win repeat business and referrals

We scoured the internet to determine the most common mortgage complaints that are leveled at loan officers about the mortgage lending process. We looked at not just what borrowers had to say, but Realtors as well.

Why is this important? Online reviews, especially from platforms that specialize in consumer affairs mortgage reviews, play a significant role in influencing consumers' purchasing decisions. Given the prevalence and impact of these reviews, some frustrated borrowers even take the step to file a complaint to report mortgage companies when their experiences are negative.

According to Qualtrics, 93% of consumers reported that they read and are influenced by online reviews prior to making purchase decisions. In fact, when delving into mortgage company complaints, 94% of those consumers also say that an online review has convinced them to avoid a business. This research makes it clear that loan originators should prioritize creating a positive borrower experience when facilitating mortgage loans. LOs can start by avoiding these three issues that were most prominent in negative mortgage reviews found online.

1. Poor communication

Poor communication, or a lack of responsiveness, is the most common complaint in the mortgage lending process. Both borrowers and referral partners, namely Realtors, want to know that the lines of communication are open when they have a question or need an update. The phrase used most commonly in negative reviews is: "calls and emails were not returned within a reasonable timeframe".

In the discussion forums that we investigated, Realtors complained that when a loan officer doesn’t communicate well, the Realtor themselves become the person in the crosshairs of the borrower(s). This is a surefire way to alienate a referral partner and give them no choice but to send their business elsewhere.

It’s hard to always be on top of every call and email that comes into the office. One way to help lighten the load is to preemptively answer many of the questions before they’re even asked.

Loan originators using Floify take advantage of automated status updates and real-time notifications to keep borrowers and referral partners informed and engaged with the process. Leveraging this type of automation is a massive time saver for loan originators.

2. Sending documents multiple times

Borrowers know when they start the lending process that there will be quite a bit of personal documentation required of them. It takes time to gather your bank statements, pay stubs, tax returns, etc, and then more time to organize the docs to send to their LO. From a borrower’s perspective, this is the most time-consuming and tedious aspect of the mortgage origination process.

After finishing all of that, being told that the LO either can’t find, lost, or “never received”, your documents is definitely one of the most frustrating mortgage problems experiences a borrower can go through. Even more damaging to the business relationship is when delays (see #3 below) push a loan application past certain thresholds that then force a borrower to submit new, updated documents.

Utilizing a mortgage document management system with a consumer-facing portal can all but eliminate these issues. A document management system will not only show your borrowers the status of their documents – what is owed, what's been submitted, and what the LO has approved –  but also helps loan teams stay organized on a file-by-file basis.

When we built Floify, we utilized an intuitive design that makes it incredibly easy for borrowers to see where everything stands, at a glance. Automated notifications let them know if a document had to be rejected for any reason, if there are new document requests in their portal, or if they’re all done! The accountability and transparency that is created by utilizing this type of solution has also been demonstrated to accelerate document collection, making the entire origination process faster and more efficient.

3. The process takes longer than average

This issue tends to be compounded by the first two common complaints. Sometimes there are roadblocks that can’t be avoided on the path to closing, but what really frustrates borrowers and Realtors is when that information isn’t communicated.

For many people, not closing on time is something that they can deal with, as long as they know. Realtors speak to how frustrating it is when an LO they’re working with doesn’t bring up issues with the loan until it is no longer salvageable in the original timeframe. Even if your intention is to try to fix the issue and get the loan back on track, it’s better to under-promise and over-deliver with expectations.

By using systems that help keep the origination process organized and on track, and by communicating early and often with your borrowers and referral partners, mortgage lenders can avoid these common negative remarks and ensure a smoother experience for all parties involved.

Moreover, by flipping these issues around and providing excellent communication and a well-organized platform, you can win positive reviews and referrals that will help promote your business organically.