Borrowers are coming to expect access to web-based technologies during the origination process.

Online borrower portals, online chat, and text messaging are changing how consumers of all ages approach the mortgage process, according to “The Digital Mortgage Experience: A Study of Shifting Borrower Expectations,” a survey from Velocify. More than a third of them prefer self-service websites, especially during the research stage of getting a mortgage.

As they progress through the application and processing stages, however, borrowers prefer an increasing amount of help from mortgage professionals through online chat, telephone, text messaging, and email.

Millennials (under 35 years of age) prefer slightly less assistance and more online chat help, especially during the application phase. Baby boomers (over 55 years of age) prefer less chat and email assistance throughout the mortgage process, opting for phone and in-person help. Baby boomers, however, embraced technology more than expected. Boomers were three times more likely to think technology improved the loan process when they were provided an online portal.

“The most interesting discovery was not how borrower behaviors have evolved, but where they are headed,” said Nick Hedges, president and CEO of Velocify. “The trend line in our data shows that all borrowers, regardless of age, have a strong preference for more online and digital interaction with their lender. To succeed in this environment, lenders have to put the borrower at the center, which means an easy interface that offers transparency into the entire loan lifecycle, but with humans behind it.”

The survey also found the following:

• Overall, borrowers who got a mortgage over the past two years were 3.7 times more likely to find their lender through online research or through social media than they were 5 to 10 years ago.
• Millennials were 45 percent more likely to find their lender online than baby boomers, who were 87 percent more likely than millennials to use their current bank or lender.
• Refinancing borrowers were more likely than purchasing borrowers to use an online lender, but recently the gap is closing. Over the past year, 47 percent of refinancing borrowers used an online lender, compared to 38 percent of purchase borrowers.
• Borrowers who got a mortgage in the last year were 42 percent less likely to find their lender based on a referral from a realtor, compared with borrowers from 2 to 5 years ago.
• Seventy-one percent of all borrowers were provided an online portal in the past two years. Those that had access to a portal were twice as likely to say technology improved the loan process compared with borrowers who were not provided this option.

“Lenders need to look at technology as more than a tool for marketing and manufacturing mortgages, but a vehicle for creating the perfect mortgage experience for all consumers, regardless of their preferences,” said Daniel Miedema, director of marketing operations at Guaranteed Rate, and a Velocify customer. “Fortunately, today’s tools enable lenders to adapt to changes in consumer behavior quickly and affordably, so borrowers get the help they need when they need it most.”

Findings from the survey were based on responses from more than 500 people who received a purchase mortgage or refinanced a mortgage over the past 10 years. The findings were broken out by the borrower’s age and when their loans closed to examine how consumer behaviors evolved over time.

Labor market expectations improved with the median one-year ahead earnings growth expectations reaching a new series’ high and households having more optimistic unemployment expectations, meaning they fear losing their jobs, according to the September 2018 Survey of Consumer Expectations from the Federal Reserve Bank of New York’s Center for Microeconomic Data. In contrast, expectations about household income and spending growth both declined. There was no change in short- and medium-term inflation expectations.

More highlights from the survey are as follows:

Inflation

• Median inflation expectations at both the one-year and three-year horizons remained stable in September at 3.0%. Inflation expectations at both horizons have been virtually unchanged since April 2018.
• Median inflation uncertainty—or the uncertainty expressed by respondents regarding future inflation outcomes—decreased slightly for both horizons compared to last month.
• Median home price change expectations remained steady in September at 3.6% after having declined the previous two months from a three-year high of 4.9% in June. Median home price change uncertainty also remained unchanged.
• The median one-year ahead expected price change for gasoline, food, college education, and rent changed little in September, staying within 0.1 percentage points relative to last month’s expectations. In contrast, the median expected change in medical care and gold increased 0.7 and 0.4 percentage points to 9.2% and to 2.6%, respectively.

Labor Market

• Median one-year ahead earnings growth expectations increased 0.3 percentage points in September to 2.8%, the series’ all-time high. The increase was driven by respondents with annual income between $50,000 and $100,000. The median one-year ahead earnings growth uncertainty was unchanged in September.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased 1.2 percentage points to 34.1% in September, but remains around its 2018 average of 34.0%.
• The mean perceived probability of losing one’s job in the next 12 months increased from 13.8% in August to 16.0% in September, its highest level since November 2016. The mean probability of leaving one’s job voluntarily in the next 12 months also increased from 20.6% in August to 23.4% in September, its highest level since August 2016.
• The mean perceived probability of finding a job (if one’s current job was lost) increased from 57.8% in August to 59.3% in September, slightly above its 12-month trailing average of 58.9%.

Household Finance

• Median expected household income growth decreased 0.3 percentage points in September to 2.5%, its lowest level of the year. The decrease was most pronounced among older (above 60 years old) and low to mid-income (annual income below $100,000) respondents.
• Median household spending growth expectations declined for the third month in a row, from 3.2% in August to 2.9% in September, falling below its 2018 average of 3.1%.
• Households’ perceptions about their current financial situations deteriorated in September, with the proportion of respondents feeling they are better off than a year ago decreasing 2.4 percentage points to 34.9%. This is the lowest level since October 2017. In addition, respondents were slightly less optimistic about their future households’ financial situations, with the proportion of respondents expecting to be worse off financially a year from now increasing 1.1 percentage points to 12.0% in September.
• The perceived and expected change in credit availability were mixed in September. The proportion of respondents reporting that credit has become easier to get than 12 months ago increased 0.8 percentage points to 24.9%, while the proportion of respondents who expect credit to become harder to get in 12 months also increased 0.6 percentage points compared to August to 31.1% in September (the highest level over the past 12 months).
• The median expectation regarding year-ahead change in taxes (at current income level) increased 0.3 percentage points to 2.5%, the series’ high since August 2017.
• The average perceived probability of missing a minimum debt payment over the next three months increased 0.9 percentage point to 13.7% in September, a new series high since January 2017. The increase was driven by respondents with low annual income (below $50,000) and low education (high school or below).

The American Credit Union Mortgage Association's membership has elected two new board members to three year terms.

Alissa Sykes, senior vice president and chief lending officer at Sunmark Federal Credit Union; and Jason Sasena, senior vice president of National Mortgage Production at Lake Michigan Credit Union have won election to ACUMA's board. ACUMA is a non-profit trade association committed to promoting credit union mortgage lending. The organization provides high-quality education and networking using experts from the mortgage banking and credit union communities.

Also, Board Chair Pam Davis, senior vice president of branch delivery and operations at Delta Community Credit Union; and past chair Mark Wilburn, senior vice president and chief lending officer at Truity Credit Union, were elected to new three-year terms.

Continuing as board members are Amy Moser, vice president of mortgage services at Mountain America Credit Union; Tim Mislansky, senior vice president of Wright-Patt Credit Union and president of myCUmortgage; and Barry Stricklin, senior vice president and chief lending officer at Tower Federal Credit Union.

The volunteer board serves as the governing body for ACUMA, a non-profit association.

Sasena oversees sales leadership, mortgage marketing and technology for Lake Michigan CU, headquartered in Grand Rapids, Mich. Lake Michigan CU operates distributed retail and member direct mortgage origination channels in Michigan and SW Florida. Sasena also held leadership roles with Kinecta Federal Credit Union, JP Morgan Chase, GMAC Residential Capital and ditech.com. He is a contributing author of “The Mortgage Professional’s Handbook,” a comprehensive multi-volume resource that covers every aspect of the mortgage business.

Sykes oversees all aspects of lending including mortgage, home equity, consumer and business lending, loan servicing and collections at Sunmark FCU, based in Latham, N.Y. Under her direction, Sunmark’s mortgage department has enjoyed significant growth. She has successfully advocated for the addition of loans from FHA, VA, USDA, SBA, the State of New York Mortgage Agency, and construction lending.

Sykes regularly mentors smaller credit unions who need assistance keeping up with the swift pace of regulation changes, or ideas to expand their impact. She is building a community banking initiative with a focus on new membership growth.