Jon Gerretsen is president of Trelix, an Altisource business
unit that helps lenders mitigate risks and reduce costs
through customized mortgage fulfillment solutions. The
views and opinions expressed in this article are those of the
author and do not necessarily reflect the official policy or
position of Trelix, Altisource or any other Altisource business
entity. The foregoing content is not intended to constitute,
and in fact does not constitute, financial, investment, tax or
legal advice. Reach Gerretsen at firstname.lastname@example.org.
Embracing the Future of Lending
Technology can be a catalyst for transparency, efficiency and success
By Jon Gerretsen
For the past six years, most of the investments in mortgage technology have centered on responding to increased regulations driven by historic market challenges. Even though
many of these regulation-driven innovations have
focused on providing increased education for borrowers about the mortgage origination process, the results
have not always been beneficial to those borrowers.
Complex and varied interpretations of these requirements too often added confusion and delays
to an already cumbersome process. The more that
mortgage companies and lenders attempted to be
compliant with newly added regulations, the more
complex the process became for the borrower.
Finally, with the culmination of the TRID consumer-disclosure rules launch in October 2015, the industry
released a collective sigh as the six-year period
where compliance and regulations were primary drivers for mortgage technology came to a close. Today,
mortgage technology solutions have shifted more
toward improving the borrower experience as well as
Current innovations are leading to transparency-based, borrower-centric solutions driven by a desire
for simplicity, efficiency and accuracy throughout the
process of acquiring a mortgage. Originators should
be aware of the history, issues and best practices
driving innovation in lender technology so they can
better serve their borrowers.
History of mortgage technology
Historically, efforts around technology advancements
were lender-based and focused on loan origination
systems (LOSs), document imaging and automated
underwriting tools. Core initiatives emphasized creating consistency, scale and greater efficiencies for the
Integrated LOSs, combined with Fannie Mae’s Desktop
Underwriter and Freddie Mac’s Loan Prospector, created objective tools to streamline processes for qualifying borrowers and originating saleable assets. In
some instances, however, these efforts led to unintended consequences surrounding the borrower
experience and negatively impacted cycle times and
Then, as mentioned earlier, from January 2010 to
October 2015, many of the industry’s technology
resources began focusing on how to incorporate new
legislation and regulations into mortgage platforms.
As expected, innovation took a back seat to development efforts needed to address changes in mortgage
policies and procedures.
Existing platforms became increasingly challenged,
Catalysts of change
as technology vendors attempted to keep them
efficient and scalable while meeting the increasing
demands of changing requirements. These reaction-
ary enhancements did not always lead to better expe-
riences for borrowers.
Today, the combination of these two catalysts — the
borrower experience combined with regulatory compliance — are influencing how next-generation technology is shaping the mortgage industry.
In the current regulatory environment, technology is
pivotal to operating in a compliant and efficient manner because regulatory changes can be both stringent
and complex. Although the ultimate goal is to streamline processes and better inform borrowers of the
required steps in obtaining a mortgage, rules like TRID
employ strict deadlines and create a higher demand
for a more manufacturing-oriented loan process.
Back-office costs have seen fourfold increases over
the past 10 years, mostly due to increased compliance
costs. The current average loan file contains 600 pages
of documentation, which forces mortgage companies
and lenders to rely more heavily on the assembly of
information through integrated technology platforms
that compile and lock down data-based loan files from
In addition, as variances in product offerings and
price continue to shrink, competitive advantages for
originators in the marketplace become more dependent on who can provide the best service levels while
delivering highly compliant loan files in a scalable,
This brings us to the customer experience.
Borrowers have expanding expectations based on
experiences with technology-related advancements
in other industries. Today’s borrowers demand the
same proactive assistance and self-service conveni-
ences they receive from other online financial and
Innovative, borrower-controlled solutions and the
“there is an app for that” culture are already dramatically influencing the mortgage technology space.
This includes the availability of mobile applications
and 24/7 access to originators as well as the ability
for borrowers to access portals to simplify the steps
and shorten the overall timeline during the mortgage
Transparency creates efficiency
Transparency continues to progress through recent
technology and regulatory developments. It wasn’t
long ago — before the Fair Credit Reporting Act, for
example — that critical data like credit scores was not
discussed or even shared with borrowers. Regulatory
advancements, evolving disclosure requirements
and borrower education efforts have led to unprecedented transparency in the process.
Borrowers are now informed, active participants
during critical junctures and decision points throughout the process. Transparency is equally important
from both a regulatory and customer-satisfaction
perspective and technology is the key enabler for
achieving success in both.
The walls that used to exist between lenders, originators and borrowers are being eradicated, empowering borrowers to play an integral and more inclusive
role. Best-in-class platforms allow borrowers to access
their loan status and complete tasks through integrated portals to trusted third parties. These portals
serve to expedite the process and put the borrower
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