<< Automation continued
from Page 67
ot too long ago a mortgage
originator would schedule an
appointment with a client to
meet in their office, or the client’s home. All applications were handled face to face because of the
magnitude of the decision to buy a home.
The originator wore a suit, they spoke professionally, and they regarded the transaction with a
sacredness that only a preacher could understand.
The originator would ask questions, explain the
process, calm the client’s nerves and proceed to
take a handwritten 1003 loan application.
Then, boom, the age of the laptop came, loan-origination software became a hit, and housing
prices appreciated at a record pace. It was then,
in the early 2000s, when the business became
flooded with part-time mortgage originators as
well as originators who were switching careers
because the money was too good to pass up.
If you could pass a state exam, you could get
licensed to earn a greater income than you ever
thought possible. Couple that with loosening
credit requirements, no income verification, and
many people’s desire to use their homes as their
own personal ATMs, and you have a recipe for
That disaster came in 2008. Lending came to
a screeching halt as the country entered a recession. Residential lending would change forever.
In the wake of the recession, came reform in
the way of the 2,300-page Dodd Frank Act. Many
of its goals were to streamline financing, make it
understandable to the client and end profiteering
off the less-savvy borrower.
This launched a new platform of accountability,
tracking and responsibility being placed on the
individual originator. By 2012, many companies
saw the need for electronic reform, both from the
standpoint of compliance as well as security and
quality of information. This led to the birth of the
TRID consumer-disclosure rules, the changing of
the parameters of the good faith estimate, and
As the industry was in the midst of change, companies that specialized in call-center operations
were able to capture the refinance market, teaching new loan officers how to originate both refi
and purchase loans, while paying them a fraction
of what a traditional loan officer would make, and
ultimately driving down their rates because they
could operate on much smaller margins than the
banks and direct lenders.
While this was happening, borrowers were
slowly getting used to speaking to a loan officer
one time, then having a processor or assistant
take it from there. The age of information at your
fingertips was bringing confidence to the borrowers so that they felt informed without having
that once coveted face-to-face interaction with
While the originator slept, the call centers were
buzzing all over the country answering phone
calls, taking online applications, and gaining the
knowledge of an experienced loan officer in the
course of a few months because of the sheer
volume they handled.
Companies were developing automated software
that integrated with financial institutions so that
bank statements could be pulled directly from
the borrowers’ bank, and the originator didn’t
need to collect that information. This leads to
accurate information being gathered, without
the threat of fraud by an originator or client.
So, what’s next? Employment verifications are
nearly 100 percent automated now, and unless
the borrower has a need for personal interaction,
it might appear the loan originator isn’t needed in
There is some good news, however. All of the
automation of the mortgage industry relies on
one simple fact: that the borrower makes the first
move. This is quite often not the case.
Many times, the client is afraid to take the step
into homeownership, or they don’t know the
options available to take cash out to consolidate
debt or remodel, or have the know-how to tap
into their equity and move up to a bigger home.
This is where the race begins.
Online lenders and big banks spend millions of
dollars each day advertising on television, websites, and sending out automated e-mails to their
client base to educate them about the process
and encourage them to use a fully automated
mortgage system, with the security of knowing
that if they want to speak to a live person, then all
they need to do is call.
“If you could pass a state exam, you could get licensed to earn a
greater income than you ever
Michael Sunnaa is production manager for neighborhood lending at Wallick & Volk Mortgage. He is a 20-plus year
veteran in the mortgage industry with an MBA degree. His experience ranges from broker to banker to direct
lender. Sunnaa has trained and managed more than 500 mortgage originators and continues to grow in changing
markets. Reach him at 626-786-6420 or firstname.lastname@example.org.
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