ortgage originators must lean into the future with innovation or risk being surpassed by their tech-enabled
competitors. Effective use of technology can translate into
less upfront work for originators, more loans in the pipeline,
faster closings and happier borrowers.
The good news is that originators can tap into a wide
variety of third-party technology that has come to market. Many of these
solutions can be added onto existing loan origination systems (LOSs) for
those who opt not to develop technology in-house. These can range from
simple text messaging apps that link into an LOS to quality-control features
that reduce risk, create audit trails, and add transparency and efficiencies
to the entire loan-production process.
For those who sell to Fannie Mae, its suite of technology solutions —
Desktop Underwriter, Collateral Underwriter and EarlyCheck — allow mortgage lenders to underwrite loans with greater certainty and less risk. The
government-sponsored enterprise also made automated asset and income
validation tools available earlier this year via third-party vendors. Freddie
Mac, meanwhile, has introduced automated collateral evaluation, automated assessments for borrowers without credit histories, and soon will offer its
customers automated asset and income verification.
Popularity with consumers
Technology has certainly created efficiencies for the mortgage industry, but
a big emphasis for technology today is the enhanced borrower experience
through the usage of mobile apps.
The astronomical ascent of Quicken Loans’ Rocket Mortgage product
may be speeding the pace of change. Quicken Loans funded $7 billion in
closed loans through its fully digital Rocket Mortgage platform in 2016, the
product’s first full year of existence. That $7 billion volume of closed loans
would put Rocket Mortgage in the top 30 of all mortgage lenders in the
Although many have made the assumption that millennials are driving
the push toward a tech-savvy origination process, statistics show the interest in digital is widespread. Of the first-time buyers that used Rocket Mortgage last year, for example, 57 percent were over the age of 35.
Data from J.D. Powers’ mortgage origination satisfaction survey released
in November 2016 shows technology is becoming increasingly important
for homebuyers. Some 28 percent of borrowers in the survey indicated they
completed their mortgage application online, up from 22 percent in 2015
and 18 percent in 2014.
Mobile devices also can be a popular way for borrowers to initiate a connection with a mortgage broker. Almost 50 percent of all webpage views
worldwide are now delivered to mobile devices. In North America, mobile’s
share of internet traffic is closer to 37 percent, which is not insignificant.
Reaching potential borrowers
Smartphones have changed the way people interact with one another.
As smartphone usage becomes ubiquitous, apps that allow mortgage
borrowers to apply and check the status of their loan applications on their
mobile devices can speed the lending process and improve efficiency.
Borrowers often like this “self-service” option, which doesn’t require
them to call or e-mail their banker or mortgage originator and wait for a
This penchant for self-service is evidenced by the sharp rise of online
banking in recent years that allows consumers to deposit checks, transfer
funds, withdraw funds, pay bills and check their account balances with ease
from a mobile app. The Federal Reserve notes a rising use of mobile devices
for mobile banking, especially among the young. Some 67 percent of consumers ages 18 to 29 who had both a mobile phone and a bank account
used mobile banking, according to the Consumers and Mobile Financial
Services report published in 2016 by the board of governors of the Federal
Mortgage originators stand to benefit from this move toward mobile technology. A self-service borrower means originators can spend less time returning calls and e-mails to report on the status of loans and more time, ostensibly,
to move additional loans through a streamlined production process.
The increased use of mobile device also opens up new ways to reach and
interact with potential and existing borrowers. Technology providers can
help originators plug into new channels of communication that feed directly
into a company’s existing processes, for example.
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