Tomo co-founder and CEO Greg Schwartz shares what’s wrong with the mortgage industry and how tech can revolutionize the consumer experience and empower agents to help buyers navigate a rapid-fire market.

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Former Zillow executive Greg Schwartz is tired of the portal wars.

Clelia Peters

“I didn’t want to be in the portal wars anymore,” he told Inman editor at large Clelia Warburg Peters on the Inman Connect stage. “It was so fun to hear Andy [Florance, CEO of CoStar] talking up here before, about Zillow and CoStar. But at the end of my days running Zillow, I fell in love with the mortgage business.”

“I loathe when customers are being taken advantage of. I loathe when Realtors are being taken advantage of,” added Schwartz, founder of digital mortgage startup Tomo. “We’ve talked about this a lot — we share this love and adoration for the most productive Realtors anywhere, and they tell me over and over and over again, that the financing should be the equivalent of PayPal to buying shoes.”

With $2 trillion traded in purchase mortgages every year, Schwartz said the mortgage industry is ripe for innovation as consumers and real estate agents call for a more seamless and reliable financing process. ” I’ve heard the same thing over and over and over again: that the mortgage is the catastrophe of the real estate transaction,” he said. “I hear the mortgage process described as the DMV equivalent of service and we’re going to solve it.”

Schwartz said Tomo is revolutionizing the appraisal and purchase-only mortgage process (Tomo doesn’t handle refinancing) by leveraging technology, local teams and local lending partners to provide a “pretty militant customer culture and service culture” that guarantees an on-time closing, every time.

“We’ve never closed a mortgage late. We’ve never missed a contract timeline,” he said of Tomo’s first five months in operation. “We’re going to close on time, every time. How are we going to do it? Local teams, local lending and mortgage operation teams that know their markets, an entirely reimagined technology suite to do underwriting and appraisals in our systems and faster.”

Greg Schwartz of Zillow

Greg Schwartz | Photo credit: Tomo

Schwartz said they’ve closed mortgages in as little as 14 days, as consumers work to stay ahead of a rapid-fire market. “We closed a mortgage the other day, because a customer needed it, in 14-and-a-half days. We count those hours,” he said. “Not a lot of lenders can close a mortgage in 14-and-a-half days. We’re getting applications to approval timelines in 18 days.”

In addition to fixing the process for consumers, Schwartz said Tomo is working to revolutionize the mortgage experience for real estate agents and help them better leverage their relationships with lenders.

“We believe that the most productive Realtors, the most productive agents and teams have a very forward position, really for forever, in the real estate transaction because they’re the best of breed in their capability,” he said. “We’re the best of breed in purchase mortgages. We think we’ll do a good job here because we’re not trying to approach it as an [attachment]. It’s not a secondary service. It’s not a clamp on for profit.”

Schwartz said Tomo works on “agent time,” which means their team offers around-the-clock customer service and updates that allow agents to track the mortgage process from beginning to end. “The communication between the processors, the underwriters, the agent and the customer has to be consistent every single time, and it has to be the channel they want it,” he said.

The communication process includes educational content, he said, along with checklists agents can use to help consumers understand every single aspect of the mortgage process and how to prepare. “It’s [about caring] and it’s a sense of service,” he said. “It’s [also about] wondrous technology, but that’s what’s not going to win. It’s a service culture to take away the pain and drama.”

Looking forward, Schwartz said the future of the mortgage industry is a real-time approval process that will accelerate the mortgage financing timeline for homebuyers.

“Over the next number of years, the federal government could make a number of changes through Fannie that allows us to make decisions faster and use connections to our bank accounts and our brokerage accounts rather than documents to underwrite a mortgage,” he said. “I think within five years we’ll have a real-time approval. You’ll put your social [security number], you’ll put a property address and if you’re a homebuyer or a real estate agent, you’ll be approved on the spot.”

The possibility of a real-time approval could give buyers much-needed leverage in what seems to be an extended sellers’ market. “If we’re doing real-time approval, it’s a hell of a lot easier to give a financing contingency or to have the strength of an offer that you’re making,” he said.

Lastly, Schwartz said real estate agents need to take advantage of the wave of innovation in the fintech space to expand their options, improve their value proposition and offer better service.

“I’m a bit intellectually offended, not morally offended, when I hear these stories of the answer [being] a single close transaction that has a corporate agent, a corporate title company, and a corporate mortgage. [That] is complete bullshit,” he said. “If you take world-class agents that care about customers, world-class service providers, they can cooperate, use common tech and do really amazing things.”

“[Agents] should be looking for a financing partner who invests in educating your customer, who’s got service standards, whether it’s us or someone else that has a consistent published time to market. What percentage of their loans close on time?” he added. “You should always know how much is in their pipeline to ensure that you’re going to go ahead and not lose a deal at the last minute or lose your customer’s earnest money.”

Email Marian McPherson

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