Success Story: Scott Dill, Highlander Mortgage
We recently sat down with Texas-based mortgage expert, loan originator and Senior Credit Analyst, Scott Dill, to discover how he uses modern technology, including the Floify digital point-of-sale system, to automate his mortgage processes, improve the loan experience with his borrowers and outperform the biggest companies in lending.
Our interview with Dill provides helpful insight for any mortgage professional seeking to find value from an automated mortgage operation.
HOW DID YOU FIRST HEAR ABOUT FLOIFY?
I originally heard about Floify from a colleague years ago. One of her employees, which was my old assistant, went to work for her. Then she called me up and said, “Hey, I’m using this really good document system and we share information all the time.” So, it was one of those, hey, this is a good thing, you might want to incorporate it in your business strategies.
HOW WOULD YOU DESCRIBE THE CHANGE FLOIFY HAS MADE FOR YOUR BUSINESS?
Well, it really helps establish that first link of trust. Mostly because most of the mortgage industry is running on 2005 technology, which is email collection of documents. And because of all the data breaches with email, it really separates me. I mean most customers are cagey, they keep a distance from you. And that’s where being software developers helps, you guys think logically and in terms of what works. But then there’s how loan officers think and how customers think, which is quite illogical and that’s kind of where it’s good for you to know where the illogical things lie because of that. So, anyway, one of the illogical areas is the customers are really weird about some things and oddly comfortable with others. So, they’re really weird about giving you their social, but they’re oddly comfortable giving you a tax return that has their social on it.
It doesn’t make sense. Right?
What I’ve learned, because I do kind of a shotgun approach whenever I talk to people and I give it a scatter shot, I can figure out what hits the mark. And what I found was, is if I lead with the social security number or even later in it, they’re reluctant, because they’ve been told don’t talk to strangers, don’t give out your social. But, if I talk to them and say, hey, you know what, let’s just take a look at your debt-to-income ratio. I’m not going to pull your credit but we’ll see what the payments are and whether you fit those parameters, you don’t have to use me and I lead with, hey you can use any licensed lender in the State of Texas, and it doesn’t commitment so I try to hit those two items. And so what I’ve done is use Floify extensively for gathering initial information. And I say, hey, we use a secure document upload system and it’s a really good way for the information for us to flow back and forth. Because there’s a lot of questions. Any lender that tells you there’s not a lot of data collection after the contract is simply misleading you.
Plus, with the regulations, they’ve forced a lot of things back and forth including the money laundering laws. They can’t get around that and if they haven’t seen your bank statements, they can’t tell you there’s not going to be some back and forth because there is going to be some back and forth and a quick and efficient way and a centralized way to do this. We do it with a secure document upload system. Here, are you on your computer? Great. I’ll send you a link right now. Okay, get in there. Why don’t we do this? Do a test document, just pick anything on your desktop, anything innocuous. It can be a picture, whatever. Upload that. Cool. And then I get it. I’m on Floify. And then I qualify that and I say, “See how quickly I qualified your information?”
Anybody else who’s going to give you this tedious checklist, then they’re going to hand it to their support staff and they’re going to wonder what you turned in, what you emailed. They’re going to go through emails. You’re going to have the same conversation four times. So, a very simple amount of document collection, you’re going to go through a very painful process. What I’m doing is providing a very quickly and efficient way that’s also secure.
Anybody asks you for your emails, they might have encrypted emails but that’s only half of it, from yours to them. It might be unsecure and considering how Gmail and Yahoo! and everybody else has conducted their business, including reading your emails these days, you really can’t trust that. Anybody proposing that borrowers use email really is doing a disservice.
So, what I do is I labeled the other people as the dinosaurs of the industry, which they are. And then also sell myself as a secure, easy and digital way to get documents to the people or to me. And this is before I even run their credit.
This prospecting, I’ve noticed that it really allows me to establish that trust. Not only that, before I hand it off to my staff, I call them Floify proficient. I’m like, “These people are Floify proficient,” which means they’ve used it. Once people use something once, it’s like a 50 times greater chance of them using a second time. And that’s why I do it while I’m on the phone. Because what they’re going to do is they’re going to forget, they’re not going to click that link. It’s scary, it’s new, they’re afraid they’re going to do it wrong. But when they do it right, I’m like, hey great job. You’re all set. You can give me your whole file.
Now. It’s kind of fun. It’s kind of, they’re making progress instead of wading through muck, which is normal loan collection. And it’s because the rest of the industry is so archaic is the reason why this stands out. The rest of the industry isn’t even semi-advanced. Even at my former company, which is supposed to be one of the most advanced lenders, their transfersafe document upload system is nothing more than Dropbox. And it’s a joke and it also sends out weird messages to the customer, tells them they need signatures. Every time they upload something it tells me they need a signature.
How would I describe the change that Floify has made for my business?
Peace of mind. Efficiency. Also, a lack of data entropy. Now, if you look at the inefficiencies in lending, everybody focuses on the application side. Rocket Mortgage. I tell you right now, that’s not the inefficiency... I can take your loan application two minutes over the phone. Taking the application is easy. It’s the processing and data entropy that you lose. So, I broke down the loan process into 165 data points. And then we found out where we were collecting data and how we were transferring from person to person. It was a person to person transfer which was the biggest loss.
BEFORE TRANSITIONING TO FLOIFY, WHAT WAS THE MOST FRUSTRATING OR CHALLENGING ASPECT OF THE LOAN PROCESS FOR YOU?
Real simple. What do we need and what do we have? The whole office is asking each other that 10 times in the same file, because everybody’s got a different idea of what’s needed.
Everybody has a different idea of what they have because it’s all collected either manually, emails, texts, verbally, and then it’s all hopscotch, all over. It’s in 10 different locations... it’s non-centralized data storage.
So, the hardest thing is transferring information. You have to manually talk about every detail, every 165 data point to hand it over. But if you put it all in one place, like a Floify and hand it over and say, now you see what I requested. You see why I requested. You see the additional information. You see the qualifying questions that I asked after I did get the pay stubs and I see they now have more than 25% commission income, which they left out of their initial application. Therefore, there needs to be a contact number to the work number and the pin code for my processor to pull a VOE on this customer.
Those are the types of things, the back and forth that goes quickly and efficiently. Not only that, but the user-facing side, when you hit them from different areas, you have them do DocuSign in a separate thing. You haven’t do disclosures in another thing. And then you have the email stuff and then you have them text and collect information verbally. You all this weird data collection and the customers feel like they’re being surrounded.
Having one area where you can collect all the relevant data digitally and it’s stored so all the different employees can pick up, so if I died, somebody else could pick up the file the next minute.
Any other process? If a person gets sick or they’re not there, the whole process stops. So, that’s a huge advantage with Floify. Also, it’s one portal or one form of data collection that the customer, so the customer knows that it’s coming from one area. It’s the user experience and then the processing and those two, because they’re in one place it’s a twofold advantage on the simple concept.
WHAT ABOUT FLOIFY MAKE YOU AND YOUR TEAM MORE PRODUCTIVE?
Floify is a breadcrumb trail for what’s going on in the loan. Now you don’t have to retell the loan story to each employee. Now you hire less staff, you have less man-hours going into each loan, so you can price them out better, so you can get more loans in. Because the fat in the system is the processing side. That’s where the margins are.
Then there’s been margin compression and that’s one of the big topics in lending. Margin compression. Margin conversion. Where’s that coming from? And how are you allowed to do margin compression when you selling the same product? Well, the only way to get it is to be more efficient on the back end, to have one employee doing more loans with the same manhours and with the same effort.
How do you do that? You don’t make the mistakes that every other mortgage company has, which is decentralized data collection and bad user experience. Also, when you’re collecting all that from one place, they start to tell the realtors, “Hey, I really like this.” This guy’s really on it. So, it creates a positive vibe. Now, that business relationship can go negative or it can go positive. You just have to be a little bit better than the last mortgage experience your borrowers had to really seem like a hero and Floify allows you to do that. If you use it right, it allows you to be the hero.
WHAT IS THE AVERAGE TIME SAVINGS FOR EACH LOAN YOU AND YOUR TEAM PROCESS SINCE USING FLOIFY?
On the loan officer’s side? Five to 10 hours per loan. Easy. Because you have to call people and you explain it and you’d go through and then, “Oh no you didn’t send this right.” or, “The scan is not right.” I mean, it turns document collection into a very manual and tedious process, especially if people are not that proficient.
So, you get the tech guy and you can give him a crappy process and do it. But it’s dealing with anybody who’s just a little bit at, which is 80% of the customers. Just not that tech proficient. When you put them into a no brainer system like this, that’s five to 10 hours. On the processing side, so, your support staff? You’re looking at 10 to 15 hours per loan. If they use it correctly. Now, what happens is you get a lot of people that use legacy programs and they use the old school systems. I mean, I don’t know how many times I’ve heard, “Well this is how we’ve always done it.” I’m like, really? Why don’t you tell Circuit City that business model?
We can talk to the CEO who’s sitting there, drinking a 40 on Laguna Pier because he’s all distraught on what happened to his career. And they’re like, “What happened to you, man?” We can talk to them and there is a wave coming through lending, and I see in an unprecedented rate. And the reason is it’s been so technology averse because of the personalities that work in banking and lending and sales, that there has been water building behind the dam. The dam is starting to crumble. It’s coming and it’s going to come really hard.
HOW MUCH TIME WOULD YOU SAY YOU SAVE EACH WEEK ON AVERAGE BY NOT ASKING YOUR BORROWERS FOR DOCUMENTATION?
Well, by not reminding, that is significant. That’s at least a few hours per loan, as far as the auto reminds and the quick communication back and forth, that saves a lot of time. I mean, it saves quite a few hours per loan and that would say two to four hours, just the reminding.
But the real value is in that initial collection. It’s really hard to get that initial stuff. I ask clients for their W2s, their pay stubs, their tax returns, their driver’s license and copy of their homeowner’s insurance. I ask them for all that stuff and they sent me part of it, and then we need to have a phone call and talk about what they sent.
Oh, and they say they sent it, and I go off to look through all my emails. Okay, at 3:42 you only sent this. “Oh, did I? Oh, I didn’t attach it.” So, because they’re disorganized and distracted, that initial document collection is difficult. And as a result, getting them over the hump, which is getting enough information to make a qualified decision whether they qualify for a loan, is really what saves me a lot of time. Because now I’m working with a customer that I can actually close or I kill the deal, because then it’s based on facts.
I don’t kill it because I want to, I don’t get paid to kill deals. I paid get paid close loans. So, what happens is you spend a lot of time, and that’s almost immeasurable, if you talk to any lenders, they spent a lot of time talking to people. You ask them how many hours do you spend talking to the people that don’t close or are not qualified? Because you got to be nice to them. You got to do this, you got to be their best friend.
Well, how about you talk to them on the phone and you say, just send me your docs. They send the docs quickly. Almost all the people upload their docs. Oh yeah, I’ve got the PDFs right here. Or I can log into my HR and I can send you pay stubs. Okay, cool. Okay, upload that. I’m going to send you a document list and I keep reminding them.
And you also find out who’s serious, the people that don’t respond to the Floify requests, they’re usually wasting your time. They’re the tire kickers, so they’re disorganized or they’re just going to shop around with 20 different places. They’re not committed. But when you give them a discreet checklist, it really separates the wheat from the chaff very quickly.
So, you get to the decision-making process of who to spend time on, which is really one of the most important things in the lending industry. Like who do I talk to that’s actually going to buy. I don’t want to waste time talking to a hundred people. It makes that decision for you much quicker as a lender of who to deal with, on who to invest your time with. You only have so many days of the week and so many hours in the day. Who are you going to talk to today to make the most revenue per hour? And it makes that decision for you quickly because it gets you information.
Like I said, the biggest question is, what do we need and what do we have? Well, I determine in Floify exactly what we need and then Floify tells me exactly what we have. So, when I’m doing a full pipeline and I’ve got a lot of loans going, I can go back to a loan that I worked on, as long as I did it correctly the first time, I can get back up to speed almost immediately. Whereas before it takes me a half hour looking around. So you’re talking about time-savings, it’s that organization of the data that really saves you a lot of time.
And it’s also in buckets. So, you’ve got the income buckets, you’ve got the asset buckets, you can customize it wherever you want. That really is also a huge time saver. Simple as it is, labels and buckets. It sounds simple, but it’s a game changer, especially when you’re busy.
WHAT KINDS OF STAFFING CHANGES HAVE YOU EXPERIENCED SINCE USING FLOIFY TO HELP RUN YOUR MORTGAGE PROCESSES?
You can take on more volume. Usually the staff stays the same but you can definitely turn more loans and processors are really happy to ask through Floify.
I deal with people all day. So, I have no problem asking for stuff from anyone. But when you delegate it to somebody who it’s not their forte but they can use Floify, it really helps them. I’m not scared to pick up the phone and call somebody and say give me your stuff. But the processors are, they’re different personalities. So, Floify allows other personalities to not take the time of the sales people away for document collection.
HAS YOUR BUSINESS SEEN AN INCREASE IN PROFITABILITY SINCE TRANSITIONING TO FLOIFY? IF SO, HOW MUCH OF AN INCREASE?
Yeah. The user experience is much better. So, I’m getting more repeat business from my Floify customers. My listing agents love the updates. I get more compliments from listing agents than I do from anybody.
The buyer’s agent kind of says, “Yeah, I gave you the deal, you kind of owe me updates.” But the reason is this, the sellers are inherently nervous because a lot of deals fall through ever since the reform of banking in 2009. So, on a very high level you got sellers who usually have another transaction based on this and you only need one or two, maybe the husband or wife or whatever, to get nervous for them to contact the realtor all the time with texts. “What’s the status of our loan?” “Where are we?” “Are we going to close?” They start getting texts and emails that say title’s been ordered. Oh, title’s been received. Oh, appraisal’s been ordered. Here’s the appraisal value.
You’ve got the seller contacting the listing agent and the listing agent contacting the buyer’s agent. The buyer’s agent contacting me. And then I go and ask the processor, “Where’s the file?” I mean, can we think of a less efficient process? That’s how all lending is done. Now, when you order the appraisal, they get a nice presentable email that tells them exactly what’s going on. Now, my buyer’s agent is not getting contacted and my listing agent feels comfortable and confident, because they’re easing the anxiety of the seller.
SINCE TRANSITIONING TO FLOIFY AND REDUCING DIRECT CONTACT WITH BORROWERS VIA PHONE AND EMAIL, HAS THEIR LEVEL OF SATISFACTION WITH YOUR SERVICES CHANGED? IF SO, IN WHAT WAY?
The user experience is good because Floify is an easy, usable, intuitive system. It also allows me to get back to the realtor quickly and efficiently, because they want to know whether they’re wasting their time with the buyer. The initial user experience is good because I get documents quickly and I say, yes, I have reviewed their taxes, their stuff and their response is usually, “Already?” Because they just talked to them 20 minutes before. I’m like yeah, I’ve got a secure system. I uploaded, I already reviewed it, I already have it. We’re good to go, actually the preapproval letter is in your inbox. You should open up your email. “Oh, wow. That was fast.” So, you get an efficient response.
So, you know how blockchain is the new rage, right? That’s the newest thing. Well, what is blockchain? It’s just qualifying information. You get data over, you qualify, and you go back.
That’s what Floify does. It’s the blockchain of lending. It allows you to qualify the information because you can upload all you want, but until you have a qualified lender look at it and determine whether this is valid, you don’t have a loan. And it allows me to make that determination quickly.
And so, that experience goes back to a faster response and the faster you get back to a realtor, each one of those hours and minutes are like dog hours and minutes. Each one’s like seven. Now, most lenders get back within one business day or a few business hours. You get back that quickly to people, you make them feel good about the transaction and they start getting excited. Yeah, I’m like, they’re all set. You can put an offer in tonight. And they say, “Really? Thanks for getting back to me.”
So, that’s kind of like a good vibe improvement. But then specifically I get the information. Once I get the contract over to my processor quickly and I know what’s in it. I don’t have to go through each file in some old software, like what we were using for document collection, which it’s horrible to use on the customer and damn near impossible to find out even what you have because you have to go through like six fields buried in there and open up this image file that’s illegible. That’s what you’re dealing with if you don’t have Floify.
The systems in lending are so inefficient and that’s not changing anytime soon because the solutions from some of the major player are what’s needed to sell the loan in the secondary market. That’s not going to change.
So, to answer your question on how Floify improves our efficiency? Floify makes people happy and productive, which inherently helps the quality of the whole loan file.
FROM A LENDER'S PERSPECTIVE, WHAT DO YOU THINK IS THE MOST VALUABLE ASPECT OF FLOIFY?
The most valuable aspect is the simplicity for the customer to get in initially. Floify is very simple to use and is user friendly. From a computing and development standpoint, there are other aspects that are more important. But the reason that’s the most important from a consumer standpoint is it’s a tipping point that will stop the transaction from going forward if it’s not met. So, those tipping points have all the weight in the world. You make something complex in the front, it feels dead.
So, that’s probably the most important piece. After that piece, the most important thing would be how quickly the customers can get to you, how you can qualify in real time and determine the viability of the loan. The customer wants to know, they’re on pins and needles. They’re kind of on trial when they’re like, do I get approved? And they’re afraid of getting turned down, right? They’ve got a lot of anxiety.
When you can do that quickly in a matter of minutes, in real time, they feel good about it. If you’re really good about the transaction, it goes from being anxiety to confidence and you get over that hump and it turns the nature of your relationship because loan officers are viewed as kind of, you know, we’re like a dentist, everybody hates us. Give me another pay stub, explain this, explain that. Everybody hates us.
Well, when I’m doing a document collection through Floify, they kind of like me. They like my presentation. They like how quick and how easy it is and I get compliments on it. Right away, I start getting compliments from the customer. I don’t get any other compliments from any other software that I have to use. Because it’s really outdated and it’s just not user friendly. Not forward facing. And I don’t blame the customers for not liking it. The stuff doesn’t work well. There’s a workaround with all of it.
IN YOUR OPINION, WHY DO YOU THINK TECHNOLOGY, INCLUDING MORTGAGE POINT-OF-SALE SOLUTIONS, IS SO IMPORTANT FOR THE FUTURE OF THE MORTGAGE INDUSTRY?
Technology allows lenders to better compete. Right now, we’re competing against the Rocket Mortgages of the industry. The bad news about competing against Rocket Mortgage is they’ve got the slick, intuitive online application and it’s really nice. The good news for us is their pricing is astronomically high. They’re almost a half point higher. So, they just have fat margins. The technology is a way for us to leverage our people and have a user experience that’s as good as a Rocket Mortgage.
If you use Floify correctly, people have an experience as good as, if not better than Rocket Mortgage. It’s really easy to sell against Rocket Mortgage because people see so many advertisements and everybody just says, what do you think those mortgages cost?
Well, you’re going to pay for it and you do. I priced out Rocket Mortgage yesterday and for the same rate on a $400,000 loan, they’ll charge $13,000 more than I would. $13,000 for the same rate. $13,000 on a $400,000 loan, it’s a little over 3% higher in cost, which is not that hard to sell against. So, to compete against these technology companies, you do need to align yourself and present yourself as secure and technologically advanced, yet independent. And people are kind of moving away from the big archaic... Corporations are kind of evil. Even like the Facebooks and the Googles and all that, with all the data selling and everything like that. So, when you’re a smaller company, who going to be your user? Those are the people that are really going to excel in this area. Because they can use this to compete against the Rocket Mortgages and come out ahead.
WHAT ADVICE WOULD YOU GIVE LOAN OFFICERS WHO ARE ON THE FENCE ABOUT USING A POINT-OF-SALE SOLUTION LIKE FLOIFY?
I would say just like anything, you have to evolve and you have to try it, jump in and do one loan with it. That would be my advice. Try it out for one month. What’s it cost you? I don’t know, 50 bucks, 60 bucks, whatever it is. Nothing. In the mortgage industry, the profit on the loan is thousands. Try one loan and see how it goes. Test it out and if it goes well, you continue with it. If it doesn’t... 99% are going to continue it. It’s that first step. It’s just like getting the borrower Floify proficient, getting that first document uploaded. You just have to get them to do it.
How I got my old company to spend the money to get everybody on Floify was, I sent an application to the owner of the company as if he was a borrower. I said lets let’s walk through as if you’re a borrower. He’s like, wow, this is really good. I told him about it for two months. He didn’t listen to me. I made him do it once the next day ordered it for everybody.
I would say just try Floify.