By Jim Probasco
A space shuttle reaches orbit just eight minutes after launch. Now, in that same eight minutes, a Quicken Loans Rocket Mortgage client can obtain full approval for a mortgage loan or refinance.
That’s the pitch Quicken is making to current and potential homebuyers. More than 500 Detroit-based developers, designers, QA techs and business analysts have spent the past five years creating the system that makes a high-speed mortgage approval process possible.
Quicken Loans Rocket Mortgage Product Lead, Regis Hadiaris, recently provided an in-depth look at Rocket Mortgage and what it means for the future of mortgage and refinance loans.
Benzinga: What was the main goal with this project?
Regis Hadiaris: We wanted to reinvent the way people get a mortgage. We know mortgages are complicated, confusing to many people and can be slow. We said we wanted something simple that's fast and clear and gives people the information they need to make good financial decisions.
We set out to build a completely customized process for clients. Customization was critical because everybody’s situation is different.
That new potential homeowner, maybe a first-time homebuyer who falls in love with a home, for example, should be able to get pre-approved, including locking in an interest rate, while he or she is standing in that house.
For those in the market to refinance a home, we wanted it to be so simple to go through the process of figuring out what options were available and what they qualified for that they would be able to do it while waiting in line at Starbucks.
How did actual development proceed and what was the result?
We started by ripping the mortgage process apart. We reimagined it. We rebuilt it. That's what you need to do in this kind of situation.
Rocket Mortgage is a responsive website that works great on a desktop computer but is also beautiful and works well on any kind of mobile device, phone or tablet. It lets you go through an experience that’s very different from anything out there today.
Currently it’s a responsive website that will also work on your phone. Apps for iOS and Android will be released soon.
Who’s it for and how will it expand over time?
Right now, as it is set up, Rocket Mortgage is for the first time homebuyer who wants to know how much they can afford or for someone looking to refinance an existing mortgage.
We have more options coming before the end of the year, for example, “I found that home on Elm Street I want to buy and I want to get approved online now for that.”
We support all types of mortgage products so if a veteran or active duty service member wants a loan, they can get a VA loan. If an FHA loan makes the best sense for a client, they can go that route. We support conventional loans as well.
On the refinance side, the process is very fast as well because we can import data from our partners. Clients can also import their income and asset information.
That’s important because the typical mortgage process is one in which you tell a mortgage banker about your situation and then the burden is on you to prove it later by producing documents.
We said, “There’s a better way. Why don't we have clients import that information upfront?” Then, number one, we can deliver a more accurate mortgage solution and, number two, there’s less work for the client later because they've already given us data during the mortgage application process.
What sort of personal data does Quicken access and how is it used?
First, we don't do anything without your permission. You give us the permission and access.
We do a full three-bureau mortgage credit pull. We analyze, not just the credit score, but also the whole credit report. When we deliver solutions to you, we’re looking at everything we talked about.
Looking at the property, the income, the assets, the credit, your entire unique situation. Then we have a set of proprietary algorithms that analyze all of that.
The algorithms look at our products and pricing and our current rates that day and our mortgage underwriting guidelines. Then we offer up the best solution for you completely customized to your situation.
To be clear, when you say “we,” you don’t mean an actual human, right?
Yes, absolutely. The Rocket Mortgage system does all the work. Then the system enables clients to click a button to be approved online and lock their interest rate online too.
Now, in the event something is missing or incomplete, we ask the client about it during the application experience. Rocket Mortgage offers up the questions we need answered and then you can fill in those answers and keep moving forward.
The process adjusts and changes depending on what that information is. Sometimes we may need to ask additional questions. Occasionally, a real live person will review the information. It just depends on the client or the situation.
What about the cost to the client? How does that work?
There is no cost to go on to Rocket Mortgage, create an account, use the system, get a solution, get approval, lock an interest rate or get a preapproval letter.
As far as costs go, they are the traditional ones that come into play with a loan.
In the refinance experience, the costs of the loan are added to the new loan amount. This way you don’t have to pay anything out of pocket.
How secure is all this personal information Quicken asks for and obtains?
That’s a great question. There's an extensive set of checks and boundaries built into the system and all the different services. Everything we do, everything that transfers over or through the system is encrypted.
In addition, we've done extensive penetration testing to make sure your information is safe.
I think what is happening is we’re getting to a point where people want to use their data in different ways. What we’re doing is opening that up to them and giving them a secure environment in which to do it.
An image from Quicken’s latest Rocket Mortgage ad, displaying a “QL” rocket.
What about some of the major challenges you came across in developing Rocket Mortgage?
I would say taking the mortgage application, processing the information, and making it very clear and understandable for a client. We have obsessed about that.
I liken it to, let's say, not knowing how to fly an airplane – most people don’t – sitting down in a 747 and you have absolutely no idea what to do or what anything means.
I feel as if that's the situation we typically put people in when it comes to mortgage information.
We worried about making everything very clear, easy to understand and transparent. If we show a number, we show the breakdown of how we arrived at that number. If we show a payment, we show the breakdown of the various components that make it up.
Another thing we obsessed about was only asking questions that were absolutely necessary. We wanted to (use those questions to) bring in all the data, income, assets, property and credit data needed to make the process easier for clients.
Finally, the other big thing was building a system that generates recommendations. That set of algorithms that takes in all that information and looks at the current market and our current products and rates – that was a significant investment. We’ve spent a lot of time working on that to get everything right.
What about add-ons or improvements to the current system?
We’re happy with where we’re at right now, but we're just getting started. We have many other innovations coming soon.
We use an agile software development methodology and are releasing updates, new features and new functionality all the time.
We’re going to continue to do that because we can continue to make this better and better. This is not one of those situations where we release it and then stop. We already have the team moving into the future.
What about future applications of this type of technology to the mortgage process or even to other areas?
We don't really speculate on other business areas we might get into, but I can tell you to your question about the mortgage process, we see a lot of opportunity to continue to build on what Rocket Mortgage is today.
There are all kinds of opportunities to continue to make the process easier, faster and better for clients. As I said, we're just getting started.
If we can remove some of the current friction and confusion in the process of buying a home or refinancing, I think we will expand homeownership overall.
At the end of the day that’s our goal.
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