Frost Bank reinvigorates mortgage lending after 20+ years out of the market

The iPhone has been around for years since its launch Frost Bank divested its mortgage business in 2000.

More than two decades later, the San Antonio bank’s mortgage business is back – and this time, customers can complete the entire process on their phones.

“We’re an expanding company,” said Bobby Berman, executive vice president of research and strategy at Frost Bank, a unit of the $52.9 billion-asset Cullen/Frost Bankers. “Acquiring a home is an important transaction in one’s life. The technology is in a place where we can provide the experience.”

The bank aims to differentiate itself by combining two philosophies that are sometimes seen as opposites: a digital experience, where users can apply for, monitor and pay their online or smartphone loans, with an emphasis on customer service, which is mortgage loans. consultants will train customers in the process. To reinforce its commitment to customer service, Frost does not pay commissions to its loan advisors and will serve customers for the life of the loan; in order to make the loan a statistically sensitive experience, an “intelligent” application was designed that aligns the questions to the borrower’s situation and can be completed at the top of the phone.

Frost decided to get back into mortgage lending about a year and a half ago.

At first, “it felt like a big business deal to us,” Berman said.

The balance of people and numbers is important because it captures the changes of people and high expectations of borrowers. Customers will be able to complete the checkout process online or on their phone, including filling out the application, taking a photo of documents to upload, monitor the status of their loan, and make payments when approved.

The emphasis on the phone “is very unique, especially good for Generation Z,” said Tammy Richards, CEO of LendArch, a mortgage consulting firm. “This is the first segment coming into the real estate market that had cell phones at birth.”

He has also seen research suggesting that home buyers who have worked with banks for a long time also prefer mobile phones, because they are familiar with the process. At the same time, some first-time home buyers will appreciate the personal touch.

Frost’s mortgage application is smart, meaning it only asks for relevant information to the applicant. For example, if the applicant does not name a lender, they will not see any further questions about the loan. together.

This is another new, and unusual, type of loan application, Richards said.

Frost has integrated a customer front-end portal from cloud-based banking company Blend with a lending system and loan servicing software from software company Black Knight. In the beginning, Frost turn to digital consulting company Infosys in 2021 to clarify its strategy. The mortgage program is also integrated into its systems, meaning “everyone in the organization can see where the customer is.” buy into the mortgage,” Berman said, including tellers and contact centers.

The bank has brought on 80 new employees as it builds its mortgage business. This includes business analysts, technical experts, legal and technical personnel. It was also necessary to hire loan counselors and staff to process, underwrite and service the loans. They will grow in terms of increasing loans.

“It’s like a beginning,” Berman said.

The timing of these workers worked in Frost’s favor. As the amount of mortgage financing decreased, “a lot of good people lost their jobs at mortgage companies,” Berman said. “We can decide.”

Frost is now taking applications from employers, and approved his first mortgage after Christmas. “A lot of people worked on this,” Bermam said. “The mortgage advisor (for the first loan) was in tears. The bank hopes to open the program to customers this year. Consumers can choose from three products: a standard mortgage, a jumbo loan and a “step-up” mortgage for low-income buyers who don’t pay private and joint mortgage insurance. Add other information for booking.

The final piece of the puzzle in Frost’s new plan is the lack of incentives. Mortgage loan officers will not receive commissions, which “changes the game from the ground up,” Berman said. “We’re trying to hire people who care about getting people into their homes, not about the mortgage.”

It’s a pattern Richards hopes to see more of.

“There are also new models coming to make mortgages more accessible to everyone, less expensive and more transparent,” said Richards. “That’s necessary.”

Leave a Comment