As the mortgage industry changes and improves, so does technology. The mortgage approval process has not changed much in 25 years, taking weeks to secure proper financing for a home.
A Forbes article titled, "Why Tech Driven Mortgage Lending Will Eliminate The Traditional Mortgage Getting Process," written by Mark Greene explains how the traditional mortgage process is withering away and technological approaches to lending are taking over.
Greene notes how the lending process has been sped up, is more accurate, and more objective through technology, but "the basic step-by-step process is not much different than it was back in the old days when I would meet borrowers at dining room tables and actually use a pen to fill out all those mortgage application forms."
Recently, Freddie Mac and Quicken Loan partnered to pilot several new initiatives aimed at helping provide more Americans the opportunity to achieve homeownership, while also building a smarter American mortgage finance system.
"We are proud to join Quicken Loans in a new partnership dedicated to increasing homeownership opportunities and simplifying the process of originating and delivering high quality mortgages," said Dave Lowman, EVP, Single Family Division, Freddie Mac. "The partnership has a simple goal. We are leveraging our unique strengths to explore simple straightforward approaches to mortgage products, technology and borrower outreach strategies. We then hope to use the results from these efforts to make it easier for all of our customers, and the industry, to make successful homeownership possible for a wider range of qualified borrowers."
In addition, Freddie Mac also offers it Loan Prospector underwriter tool free of charge and Fannie Mae offers its Desktop Originator tool free of charge as well. Fannie Mae also plans to also enhance its EarlyCheck loan verification tool and introduce a new loan delivery system in the near future.
Fannie Mae says that these new updates and changes are intended to help customers originate mortgages with certainty, efficiency, and lower costs.
“We continue to strive to have lenders choose Fannie Mae because we provide the most insightful, innovative and effective tools in the industry,” said Andrew Bon Salle, EVP of Single-Family Business at Fannie Mae. “For years, our technology tools have been the tools of choice for mortgage lenders across the industry.”
Greene discusses in the article how delivering a mortgage that is ready to close in week is much too long for consumers who are not accustomed to waiting for anything these days.
He added that as of now, "the mortgaging process uses a menu of technologies to perform the various tasks necessary to create a successful and salable loan, but the master technology needed to integrate this symphony without help from humans, is yet to come online."
Vincent Furey, SVP of Lending Solutions at OpenClose told MReport that he "disagrees that our industry is stuck in the 'we-have-always-done-it-this-way' quagmire"
He added, "The levels of risk associated with mortgage lending has never been greater. Within the four walls of OpenClose, with our customers, vendors and competitors we've seen more innovation in the last 3 years than our industry has experienced in the last 25 years. The reality is that our current regulatory and risk environments would have turned a few weeks into a few months without recent innovation. Add up regulatory risk, collateral risk, counter party risk, QM/ATR, TRID and the CFPB, and our industry can be proud of the innovation that's preventing the 6 month mortgage process."
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