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LendIT - April 2016
How Technology is Playing a Role in the Transformation of Home Loan Financing
2
Consumer Preferences Changing Rapidly
Financial Institutions Lag Behind
National Banks
16
Regional Banks
22 61
Net Promoter Score(1)
Delivery of Services is Evolving
> Find a Job
> Find a Product
> Find a Place To Stay
> Find a Restaurant
> Find a Doctor
> Find a Home
> Find a Ride
> Find Delivery
> Find a Friend
> Find a Loan
1. 2015 Net Promoter Score.
Financial services have been slow to respond, until recently
3
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)
4
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)
5
Millennials & Home Buying
Source: Freddie Mac: Profile of Today’s Renter Multifamily Renter Research January – February 2016
Question: In the next three years, do you expect to...?
6
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
• No Actionable Items• Confusing Process• Lots of Paperwork• Limited Self-Service• Long Timelines
• Consumer Empowerment• Streamlined Process• Digital Information• New Underwriting • Shorter Timelines
The FutureTraditional
7
• 1st vs. 3rd Party Data• Machine Identification• Geo-location• Fraud Detection• Fast Changing Models
• Credit Report • Alternative Data Sources• Credit Underserved• FICO Score – Pros and Cons• GSE Underwriting Guidelines
Credit Underwriting ID Verification & Authentication
Technology & Risk Modeling
8 Funding Underwriting Processing Application
Emphasis on Technology & Innovation
Example: Reducing App-to-Fund Timelines Through Technology
• Digital applications •
• Hard-copy supporting documentation
•
• Imaged closing documents
• Enhanced borrower ID data collection and verification
• KBA & Digital ID Capture
• Fully automate all credit bureau information
•
• FICO, Modeled Income, Current Debts, etc…
• Property information from county recorder’s office data in real-time
•
• AVMs for fast qualification
• Income verification from W-2s, tax returns, and bank accounts
•
• Link bank accounts to borrower application
• 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
9
loanDepot’s Unique Platform
2nd largest non-bank direct
to consumer lender
Profitable since 2012
$60+ Billion funded in 6 years
$29 Billion funded in FY 2015
118% annual originations
growth(1)
Across Convenient Distribution
Channels
Providing a Broad Range of Consumer Lending Solutions
Home Loan
Personal Loan
Home Equity
In a Capital Light Model
GSEs
Institutional Capital
Banks
Cost-Efficient Lead Generation
TV
1. 12M2015 relative to 12M2014.
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