Fax Machines & Green Screens: Using design to humanize mortgages

This post is the second in a series explaining that at Blend, we work on mortgages because they’re HARD. Check out the first post here.

Talk to any recent homebuyer, and you’ll quickly learn how frustrating and stressful it can be to close a mortgage.

What’s surprising about that is the biggest purchases are typically the ones with the best purchase experiences. Cars, jewelry, appliances, furniture — these are all sold in beautiful showrooms, accompanied by thoughtful educational materials, and can be easily bought the day you start shopping for them. The buying experience is simple and convenient because it’s been designed with people in mind.

In this post, we’ll walk through a typical mortgage applicant’s journey. Is the process simple and easy to understand? Is it convenient and quick to close their mortgage? Is the experience of buying a house, the biggest purchase most people ever make, designed with people in mind?


Getting Started

Imagine you and your spouse just found a home you love. You make an offer, get into contract, and are eager to close. There’s just one thing between you and your dream home — your mortgage.

No big deal. You Google “apply for a mortgage” and find dozens of websites promising fast approvals. You pick one and get started online. A few minutes after filling out some information you’re told “A Loan Officer will contact you to complete your pre-qualification request.” Hmm…what’s a pre-qualification?

On Monday, a loan officer named Jason calls you. Jason needs you to answer some questions to put together an application for you. You’ve already filled out this information online, but Jason is friendly and helpful and seems like he can help you get a mortgage.

After you’ve rehashed the basics, there are lots more questions: Where do you work? How long have you worked there? Oh, you switched roles recently — how long have you been in your current role? What is your income? How much of that comes from your bonus? How often are you paid? Fifteen minutes in, you are more confused than when you started. You need to pick up your son from soccer practice — how much longer is this going to take?

In the mortgage industry, it is still common practice for consumers to print, sign, then fax documents.

Finding a fax machine

Jason sends you away with homework — a long checklist of items needed to complete an application. You have already filled out the application forms online. You have already talked with Jason for half an hour. What else could he possibly need? You’re confused, but you really want that dream home — so onward you plug.

Digging through the checklist, there are forms to fill out. Documents to provide. Disclosures to sign. You don’t even know what a disclosure is. It’s been two days since your Google search misled you, and you’re only just starting your application.

Over the course of the week you spend your nights working through the checklist. You search through files to find your old tax returns. You print out copies of your old bank, brokerage, and retirement statements. You can’t find your paystubs on your HR portal, so you spend a lunch having someone from payroll get them for you. Finally on Saturday, you have time to drive to a FedEx Office to fax the wet-signed Disclosures and Intent-to-Proceed forms you hardly understood. It’s almost an entire week since you first submitted the form online, and there’s no end in sight. You email Jason asking for an update.

As ridiculous as it may seem, there are actual “green screens” still in use at mortgage lenders. When a business runs on old technology like this, it’s not surprising that the consumer experience lags as well.

Wait and hate

On Monday Jason emails you back. For the first time, he explains the steps to closing:

  1. They will vet your documents and prep them for underwriting
  2. They will underwrite your application
  3. Your appraisal will come back, and if everything checks out you will be eligible for approval
  4. If you are approved they will start your closing

Jason explains they are reviewing your documents, and you should sit tight. How much longer will this take?

On Tuesday you get a call from a colleague of Jason’s you’ve never met. She’s calling because there are some pages missing from the back of your checking account statement. You double check and tell her you’re sure you sent all of them. That’s when she says to you: “No… you didn’t send the very last page. The one that says ‘this page intentionally left blank.’ I need that one too.”

Congratulations — you’re (conditionally) approved!

On Wednesday you get some confusing news. You are conditionally approved. Oxymoron notwithstanding, Jason’s optimism encourages you, so you start your checklist of your approval conditions.

At the top of the list is a request for even more information about your checking account. It turns out you have a large deposit and need to write a letter explaining why. With your realtor worried about you closing on time, you decide to skip a work meeting to scan the bank statements showing the source of your deposit.

Looking down the rest of your list, you see a number of similar tasks. Proof of home insurance. Missing pages of documents. Letters of explanation. After so many cycles of back and forth, why haven’t they asked for any of this earlier? Two weeks into the process, you’re still not approved, and it’s not clear when you will be…

A typical mortgage application has 100s of pages of forms and documents.

Avoiding the financial colonoscopy

I’ve heard from multiple Loan Officers that getting a mortgage is like a “financial colonoscopy.” People are so tired from the hassle of getting their keys, that they’re no longer excited to step into their home. At Blend, we’re working to make getting a home less of a financial chore, and more like the delight of driving a new car off the lot.

This means giving people an experience they can love:

  • A digital application you can complete and access on all of your devices.
  • A clear map of the mortgage process, and guidance through it.
  • A fast, easy, and safe way to share your information without having to scan, fax, or email documents.

Buying a home should be a straightforward experience that empowers you, not a confusing one that makes the responsibility of taking on debt opaque. We’re working really hard to make this a reality, and we’re doing so by putting the needs of real people at the center of the experience.

Adam Ting heads the design team at Blend, a Silicon Valley technology company powering the next generation of mortgage lending.