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The State of Mortgage Originations in a New Decade

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Altisource released its 2020 “State of the Originations Industry” report recently and found that 22% of those surveyed said artificial intelligence as the most important factor in a competitive mortgage market. 

“While the cost to originate a mortgage has continued to rise in recent years, advances in technology are providing opportunities to improve the bottom line,” said Ben Hall, VP, Product, Altisource. “It is more important than ever for organizations to invest in technology and work with vertically integrated third-party service providers to leverage leading technology solutions.”

The report says AI and machine learning are driving new technology adoption in two areas: point of sale (POS) solutions and back-office workflow. 

“POS solutions are being used to improve the customer experience by making the process of applying for a loan more simple and consistent. Back-office workflow incorporates AI and machine learning to improve quality, drive efficiency and enhance margins for early adopters. Two examples of how organizations are using these technologies include high-volume document processing and intelligent data extraction,” the report said. 

Mortgage professionals noted a high level of concern for loan production expenses, and they will continue to increase and volume will drop. Ninety percent of those surveyed cited concern, which is up 78% from 2018. 

The leading ways to adjust the increased cost of production were adding automation to the process (24%) and consolidating vendors (24%). 

The survey found most organizations plan to expand their product offering for non-Qm mortgage loans, construction lending, and HELOC over the next six months. Also, more than two-thirds origination professionals plan to expand their offering to include HELOC (67%), followed by construction lending (62%), and non-QM (61%). 

More than 200 mortgage professionals were surveyed for the report between July 17 and July 27, 2019.

The Mortgage Bankers Association reported mortgage applications fell 6.4% from the prior for the survey ending on February 14.  

The refinance index fell 8% from the prior week and was 165% higher than the same week in 2019.

The seasonally adjusted Purchase Index decreased 3% from one week earlier. The unadjusted Purchase Index increased 2% compared with the previous week and was 10% higher than the same week one year ago. 

About Author: Mike Albanese

A graduate of the University of Alabama, Mike Albanese has worked for news publications since 2011 in Texas and Colorado. He has built a portfolio of more than 1,000 articles, covering city government, police and crime, business, sports, and is experienced in crafting engaging features and enterprise pieces. He spent time as the sports editor for the "Pilot Point Post-Signal," and has covered the DFW Metroplex for several years. He has also assisted with sports coverage and editing duties with the "Dallas Morning News" and "Denton Record-Chronicle" over the past several years.

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