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3 Tech Trends That Will Drive Mortgage Lending

digital lendingBig banks and lenders are taking advantage of new tools to meet increasing borrower demands. Independent brokers, on the other hand, are struggling to keep up.

Some financial institutions lean on service providers to white label and maintain technology. The biggest ones hire their own developers to create an in-house digital mortgage platform. But for independent mortgage brokers, the $100 million price tag of a proprietary system is a bit too steep. Brokers know they must evolve to compete, but where’s the middle ground?

Fortunately, evolution hasn’t left the little guys behind. At a recent conference in Las Vegas, new tools and a broker ecosystem were debuted that will help independent brokers compete with the biggest industry players. However, not everyone will need these new tools. Many small lenders and brokers are adopting their own tech or white labeling through partnerships just like the big players. Regardless of the path they choose, mortgage brokers must learn to love technological advancements in the mortgage process—or find themselves losing clients to businesses willing to evolve.

Only by adopting today’s technologies can brokers hope to leverage tomorrow’s tools to their full potential. Consider these three upcoming changes and how brokers will need to adapt:

1. Fully Digital Mortgage Platforms

Right now, some parts of the mortgage process are still offline. But that’s all about to change. New tools and security will soon enable most consumers to complete the entire mortgage process without ever stepping foot into an office. Digital mortgage platforms will consist of APIs communicating between systems, including escrow, title, and more. Borrowers will close on loans within a day or two, not weeks, and brokers unwilling to accelerate will become obsolete.

That’s not to say that brokers themselves will be phased out. Mortgages are big decisions, and people need that guiding hand throughout the homebuying process. Brokers will simply need to learn where they fit in a redefined mortgage landscape.

2. Advanced Predictive Technologies

Most technologies today are limited by the abilities of the humans who use them. Tomorrow’s technologies will know how to handle themselves. Machine learning, artificial intelligence, and blockchain tools promise to show consumers a new level of convenience.

AI tech will soon be able to tell brokers when borrowers are ready to act. Brokers will need to know when to reach out to borrowers, rather than wait for borrowers to approach them. With blockchain, borrowers will be able to close on mortgages in shorter time frames using decentralized ledgers and more secure processes.

3. Simplified User Experiences

In the age of the smartphone, borrowers, especially millennials, care more about easy paths to their preferred outcomes. Most borrowers even indulge their cravings for instant gratification for large purchases like mortgages. In fact, a majority of borrowers don’t like to waste time shopping around for mortgages even though it could save them money. Thanks to rising tech that makes fast, informed decisions possible, brokers will need to be ready for users who are ready to buy quickly.

For brokers, these changes signal a new dawn in the mortgage industry. Advanced technologies will lead to higher expectations, and only brokers familiar with the new landscape will be equipped to compete.

About Author: Bill Lyons

Bill Lyons is the founder and CEO of Griffin Funding, a mortgage tech lender that serves military and self-employed borrowers. He is also the co-founder of Greendoor, a new real estate search tool for first-time homebuyers. Lyons is a member of the San Diego chapter of Entrepreneurs’ Organization (EO) and a regular contributor to Forbes Real Estate Council. His opinions and accomplishments have been featured in Entrepreneur and Forbes.
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