How Technology is Playing a Role in the Transformation of Home Loan Financing LendIT - April 2016
Consumer Preferences Changing Rapidly Financial services have been slow to respond, until recently Delivery of Services is Evolving Financial Institutions Lag Behind Net Promoter Score (1) > Find a Job > Find a Product > Find a Place To Stay > Find a Restaurant > Find a Loan > Find a Doctor 16 22 61 > Find a Home National Banks Regional Banks > Find a Ride > Find Delivery > Find a Friend 1. 2015 Net Promoter Score. 2
Consumer Expectations – By Process and Age Cohort Majority of consumers now prefer to be online compared to traditional • methods such as in person or on the phone Especially true for Millennials • Remains the case for all age groups other than the Silent Generation – Source: PWC – Consumer Lending: Understanding Today’s Empowered Borrower (June ‘15) 3
Consumer Expectations – By Process and Asset Class Student borrowers are the most likely to prefer online applications • Reflecting the younger demographic – Auto loan borrowers are most likely to favor a traditional lending application • • Driven by the high propensity for borrowers to complete the loan application in person at a dealership Source: PWC – Consumer Lending: Understanding Today’s Empowered Borrower (June ‘15) 4
Millennials & Home Buying Question: In the next three years, do you expect to...? Source: Freddie Mac: Profile of Today’s Renter Multifamily Renter Research January – February 2016 5
Home Loan Solutions: Powered by loanDepot Make the home loan process as easy and tech-enabled as possible, and empowering the borrower to use an omni-channel platform REDEFINE THE CONSUMER EXPERIENCE The Future Traditional • No Actionable Items • Consumer Empowerment • Confusing Process • Streamlined Process • Lots of Paperwork • Digital Information • Limited Self-Service • New Underwriting • Long Timelines • Shorter Timelines 6
Technology & Risk Modeling Credit Underwriting ID Verification & Authentication • 1 st vs. 3 rd Party Data • Credit Report • Machine Identification • Alternative Data Sources • Geo-location • Credit Underserved • Fraud Detection • FICO Score – Pros and Cons • Fast Changing Models • GSE Underwriting Guidelines 7
Emphasis on Technology & Innovation Bringing digital experience in our personal loan product to the home loan process • Automated retrieval of borrower data, real time status, mobile first interaction and a • streamlined user experience will become mainstream in home loans Example: Reducing App-to-Fund Timelines Through Technology • Digital applications • Enhanced borrower ID • Fully automate all credit • Property information from • Income verification from • data collection and bureau information county recorder’s office W-2s, tax returns, and • Hard-copy supporting verification data in real-time bank accounts • documentation • FICO, Modeled Income, • • • • KBA & Digital ID Capture Current Debts, etc… • AVMs for fast qualification • Link bank accounts to • Imaged closing documents borrower application 8 Funding Underwriting Processing Application
loanDepot’s Unique Platform $ 60 + Billion $29 Billion 118% Profitable 2nd funded in FY 2015 annual originations since 2012 largest non-bank direct funded in 6 years growth (1) to consumer lender Across Convenient In a Capital Cost-Efficient Lead Providing a Broad Range of Distribution Generation Consumer Lending Solutions Light Model Channels Home Loan GSEs TV Banks Home Equity Personal Loan Institutional Capital 9 1. 12M2015 relative to 12M2014.
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