How Technology is Playing a Role in the Transformation of Home Loan - - PowerPoint PPT Presentation

LendIT - April 2016

How Technology is Playing a Role in the Transformation of Home Loan Financing

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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

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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)

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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)

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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...?

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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 Future Traditional

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• 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

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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

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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.