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Scotsman Guide Residential Edition | ScotsmanGuide.com | March 2018 62
usiness professionals sometimes
read and re-read books that
greatly impact their way of thinking. Often, elements of a classic
can be timeless and relevant while other components can become quite dated. This is the
case with “Never Wrestle with a Pig,” a book
filled with ideas to build your career, published
in 2001 by Mark McCormack.
The key take-aways of this book are timeless,
like: “It pays to overestimate your competition,”
and “time in front of the customer is the best
time of all.” The introduction, however, betrays
the book’s age, when it ponders whether “the
internet” will make a meaningful impact on the
way people do business. Today we can chuckle
at this question, because internet-based technology has disrupted multiple industries, including travel, securities brokerage and retail.
More relevant, however, is an anecdote told
regarding the negotiation and closing of a deal
entirely via e-mail. One of the author’s employees practically brags about not having made a
phone call or attended an in-person meeting
throughout the process. Even today, lending
professionals know that the human element
continues to play an important role in the mortgage process, particularly when it comes to
developing customers, generating leads and
Questions remain, however. Can technology
truly replace human interaction through the entire
lending-deal cycle, like this employee claimed?
Can it replace the business-development and
Rise of online lenders
The proliferation of online lenders, both within standard residential lending, and in more
nuanced commercial lending on residential
fix-and-flip deals, has clearly demonstrated the
ability to leverage technology to market, qualify,
originate, underwrite and ultimately close loans.
Technology is now being used to automate
many aspects of the process, and is especially
useful when there is a formulaic, or matrix-based
qualification system in screening customers. Application data can be captured, scraped and analyzed to make a decision on a loan in “as little
as 8 minutes,” according to an ad for one such
Once a loan is pre-qualified, the collection of
diligence materials can be facilitated using technology. Whereas e-mail eliminated the need to
fax or mail tax returns, bank statements and pay
stubs, sponsors now have access to web-based
portals for document uploading and sharing.
In addition, although software tools have not
yet eliminated the demand for the traveling
notary, documents requiring a signature like
disclosures, loan documents, mortgages and
notes can be generated directly for ultimate
execution. This virtually eliminates any manual data-entry work, and drastically reduces the
occurrence of errors.
Process vs. relationships
Without exception, technology has improved,
smoothed and increased the throughput
across most facets of lending. It is important to
recognize, however, that each of the processes
benefiting from the use of technology are just
that — processes. Technology has potentially
disrupted those loan-processing functions that
had historically been incredibly manual in loan
origination, underwriting and closing.
The use of ever-evolving technology will
continue to improve manual functions across
the lending industry — and all industries. The
question that persists in most of our minds is
whether the human elements in lending can be
replaced in a similar manner.
Can the relationship development and
relationship management in which mortgage
professionals engage ultimately be automated?
Will artificial intelligence supplant the interpersonal interaction that cultivates repeat relationships and business over the long term?
Where technology falters
It can be argued that on the origination, debt-placement and fund-raising fronts, a flurry of
activity in the form of web-based platforms is
already disrupting the human execution of
these activities, not only in the housing but
across other investment-asset classes as well.
Significant media attention made
it seem like these sites and
other crowdfunding platforms were poised to
“The proliferation of
online lenders … has
the ability to leverage