Outside the Box: How the coronavirus pandemic could forever change home buying and mortgage lending

Outside the Box

Borrowers and lenders will face these 3 new and unfamiliar ways of doing business


Bloomberg News/Landov

Extraordinary times call for extraordinary measures. Business leaders in all parts of the U.S. economy are taking bold steps to respond to the coronavirus crisis. Those of us in the mortgage industry are implementing reforms that will be long-lasting in terms of how lenders operate and how consumers obtain financing. Here are three ways in which the crisis may permanently affect the housing sector:

1. Increased digitization: The COVID-19 pandemic has resulted in mortgage lenders revisiting and, in many cases, adopting measures to digitize the mortgage process. Firms like the one I lead favor an omni-channel approach, giving consumers the option to work with our loan officers in person or over the phone and online.

The current crisis has “brought forward” some of the internal conversations we were planning to have about how to massively transform the online digitization and automated underwriting process for our borrowers. That time is now, as consumers are opting to research and buy their homes online — not wanting to risk their health with in person exchanges. One popular home listing website saw its online traffic for virtual tours increase more than 190% in March, compared to February. Another real estate brokerage experienced almost a 500% surge in requests for home video tours. Innovative realtors are even providing “drive through closings” in which customers and realtors exchange paperwork and keys while sitting in their own cars.


Keeping customers in their homes during strong and (especially in) weak economies must be priority No. 1 for financial institutions.

2. Delivering consumer relief with scale and speed: Keeping customers in their homes during strong and (especially in) weak economies must be priority No. 1 for financial institutions. We all learned from the Great Financial Crisis of 2008-09 that losing your job shouldn’t not mean losing your house. Lenders aren’t just in the business of providing loans but helping consumers pay them off (and own their homes) as quickly and responsibly as possible.

As millions of Americans lose their jobs, many are facing the prospect of not being able to afford their mortgages. These homeowners are seeking what’s known as “forbearance,” a payment deferral so that borrowers can get back on their feet and return to a regular payment schedule. The coronavirus crisis so far has generated more than 3.5 million forbearance requests. My firm alone has seen tens of thousands of requests from homeowners, with the most inquiries coming from homeowners with jobs in the hospitality, travel, gaming and fitness sectors. When the world (hopefully) returns to more normalcy, mortgage firms should always be on the lookout for ways to partner with customers to achieve the goal of responsible homeownership — and develop ways to help people keep their homes.

Read: If you’re skipping your mortgage payments, watch out for this costly mistake

3. Leveraged technology to serve borrowers: In recent weeks, our servicing department has experienced a surge in call volume, as our customers are keen to learn what forbearance programs are available to them. The increased demand has made us rethink how we can more efficiently and effectively serve our customers.

While we certainly encourage our customers to call, it’s clear that many borrowers — especially millennials — prefer to interact with us online. We’re exploring how to use artificial intelligence and chatbots to more quickly respond to requests across multiple formats such as our websites, social media, and text messaging. The pandemic has certainly made us think through how we can use automation to better service customers to get the information they need quickly.

While the pandemic didn’t create the need for digitization and automation, clearer forbearance policies, and better customer service, it certainly has made mortgage executives prioritize these things — and the housing sector can emerge stronger and more customer-focused as a result.

Sanjiv Das is the CEO of Caliber Home Loans. Previously, he was the CEO of CitiMortgage from 2008 to 2013.

Read: The stock market’s rallying while the economy’s tanking — here’s the simple explanation for that

More: To save the economy, the Federal Reserve should drop interest rates to less than zero

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