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The Future of Mortgage Banking

The future of mortgage banking has always been reliant on industry leaders proactively seeking new opportunities to grow their business and leverage technology. Finding solutions that help the customer make informed decisions and giving them access to information and resources is vital.

The mortgage world is a lifelong business and nurturing long-lasting relationships with our clients is essential. It doesn’t just stop when the deal is made, we need to continue to empower our customers. Additionally, constantly adapting to the changing landscape requires investment in people to prepare our teams for tomorrow today.

Going into 2020, this year was looking great for our industry. We had no idea that it would be even more than we expected. Though it has been challenging at times to face new obstacles and confront the pandemic with optimism, lower interest rates and a rising attraction for equity investment have given many loan applicants the opportunity to refinance or rethink their investments. But with all of this, we know there is still crazy uncertainty waiting around the corner. All we can do is be ready for anything.

Innovation Is Key

Technology will continue to drive the momentum for the industry for the foreseeable future. The virus will eventually go away, but the need to continue evolving the tech of our industry will not. Technology has become more important than ever due to social distancing and working from home, but that doesn’t have to be a disruption. Having a greater affinity for innovative resources can help any company weather this storm.

Many firms that were really ready for the pandemic are thriving. By adopting tools like e-conferencing, electronic binders, and other systems before they were even needed, businesses have been able to run mostly unencumbered. This principle will surely hold true for the future as well. Companies must continuously innovate because when they don’t adapt and grow with the changing market, they risk becoming irrelevant or suffering uncompetitive margins. That’s why innovation is the cornerstone of any hopeful mortgage strategy.

Going forward, the industry will need to fully integrate with eClosing systems and use Remote Online Notary (RON) as a matter of course. This would allow consumers to eSign all closing documents and would eliminate the need for face-to-face interaction. Using video conferencing, multifactor authentication, and eSignatures, customers can get their loan documents processed and notarized from their home.

From a digital standpoint, there are many other ways to improve the process for homeowners and originators. Mortgage companies need to implement these to allow us to help more people with less cost. Lenders should investigate all avenues of progress possible, but tech for tech’s sake can be an expensive trap if we’re not careful. If the goal is to build technology that really helps deliver value, then it is something worth investing in.

The Consistency of Change

The key to adapting in uncertain times is to expect constant change and to strive for constant improvement. The mortgage industry should take this to heart because we never know what will be thrown at us. Everything changes, and the current environment is the perfect example of this. But the pandemic isn’t the only example. The Great Recession, 9/11, the dot-com bubble are all events that catapulted the market into uncertainty. It’s important to be aware of the change and be prepared to adapt accordingly at a moment’s notice.

Though we all want the silver bullet, software app, or magic wand that fixes everything, lowers errors, increases margins, and works 24/7, such a thing does not exist. Mortgage companies can certainly do their best to be on top of the latest technology and tools and ensure they are up to date, but at the end of the day, there is no replacement for experience and knowledge.

Don’t Forget Your People

In the mortgage industry there is a constant pull between automation and human relationships. If lenders don’t keep pushing change and implementing technology, they may suffer inefficiency. If they spend too much on technology that they’re not prepared for, they will suffer inefficiency, and if they only value technology, they will alienate their people. It’s a tough balance. The future for the mortgage industry depends on us striking the right balance. We need innovation, but people are integral for a healthy business.

In our hyper-specialized world, no one can function alone. In mortgage, there are a whole host of professionals with specific skill sets. From originators to underwriters, processors, funders, closers, and more, they all have tasks to perform and ideas to share. Corporations must allow space in their strategy to build, nurture, and constantly up-skill their teams. Continuing to put
emphasis on team development will be key for mortgage companies in the current market boom.

However, there will always be cycles when there is no money or “negative money” in our sector, the most recent being 2018. This is when corporate culture and values come into play the most. Mission and vision statements serve to provide purpose because the best employees don’t just work for the money.

It’s true the mortgage industry is going through unprecedented times, but it is also an incredible opportunity to build what we have and plan for future growth. It’s a complex world out there, with every problem encapsulated within it. Managing issues ranging from public policy, business cycles, geopolitics, monetary risk, operation risk, credit risk, brand risk, legal risk, compliance risk, and more is a challenge to which we must rise. The important thing is to not be paralyzed by it, but to embrace it, develop scenarios and plans, then innovate and adapt.

About Author: Scott Gordon

Scott Gordon - Open Mortgage
Scott Gordon is the CEO of Open Mortgage, a retail lender offering wholesale and correspondent services for banks and credit unions. Gordon has a professional education in software engineering and an interest in start-ups and business investing. He previously served as Founder and CEO for various tech startups and is currently a board member or investor for financial organizations across the country.
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