Brian Honea is a freelance writer working for Little Creek
Real Estate, an investment company and mortgage servicer
based in the Dallas area. Honea has written for many forms
of media in the past two decades. He has published four
nonfiction sports books, the latest of which, “The Life of
Coach Chuck Curtis,” was published by TCU Press in 2014.
Reach Honea at firstname.lastname@example.org.
Quickening the industry
The introduction of Quicken Loans’ Rocket Mortgage
in early 2016 — and promoted heavily during that
year’s Super Bowl to an estimated 110 million people —
promises a speedier return on investment. It also
incited the wrath of many naysayers, however,
who claimed that quickly issuing loans via a “Push
Button, Get Mortgage” method was akin to the subprime loans that caused the 2008 mortgage crisis.
The idea was simple — would-be homebuyers
could use their phones to get approved for a mortgage
Quicken responded to this barrage of criticisms by
tweeting that “Quicken Loans does not, nor has it ever,
mortgage industry have come to pass.
Speed has fascinated the world for decades. Einstein studied and measured speed exten- sively, and people have been captivated by the fastest Olympic swimmers, sprinters
and skiers — not to mention race car drivers and test
pilots — for as long as humans have competed against
Clearly, speed is a big draw — in almost everything.
This “life in the fast lane” mentality has intensified in
the digital age. Speed has become the hallmark of the
Digital Revolution, with most industries integrating new
technologies into their everyday operations to provide
customers with faster — ergo, better— products and
services. Take the internet, for example. The biggest
selling point for online service providers is the speed
of their data.
For most of the 20th century, however, the homebuying process was largely thought of as a slow,
painstaking, cumbersome process requiring endless
steps, numerous participants and a never-ending
stream of paperwork. All of that is finally changing.
Mortgage technology aims to reduce costs and
streamline the homebuying process but, arguably, the
main objective to applying the latest technological
advancements to the housing market is to make the
industry move infinitely faster. If mortgage originators
want to remain relevant to today’s homebuyers, they
must learn to live life in the fast lane.
Repurposing old tech
In some cases, it is not new technology that has
changed the housing industry, but existing technology
applied in a new way. One big obstacle to speeding
up the homebuying process is the amount of admin-
istration required. The use of blockchain technology,
which helps prevent double-spending on electronic
currencies like bitcoin, is attempting to eliminate
administration from the equation.
Several countries, including Sweden, have commenced pilot programs applying blockchain technology to manage real estate transactions. The idea is to
create a simple database using blockchain, which is like
a digital ledger, to house all the documents associated with obtaining a mortgage loan for all participants — buyers, sellers, originators, title agents, etc. —
to easily view at any time.
The use of blockchain technology removes the need
for endless pages of paperwork, saving huge amounts
of money and time for mortgage processors. But the
beauty in using blockchain technology for a residential mortgage loan is in quality control and compliance. With blockchain, when a lender is audited, all of
the documents related to a particular mortgage loan
are easily retrievable from one location.
Although blockchain technology has been around
for nearly a decade, other industries — including
mortgage lending — are now looking to repurpose
it for their own uses. This past March, Texas-based
technology startup Factom introduced a host of new
blockchain mortgage products designed to create
chains of documents to easily provide evidence of
Blockchain technology is still a long way from
becoming an industry norm, however. Debbie
Hoffman, a compliance attorney who specializes in
technology in the financial services industry, feels
blocchain could be a real game changer for the mortgage industry, but she doesn’t believe it will become
commonplace for at least five years. The reason?
Because blockchain’s cost-saving benefits won’t be
realized quickly enough for an industry driven by the
Mortgage Life in the Fast Lane
Closing loans quickly is a priority for everyone in the industry
By Brian Honea
Continued on Page 108 >>