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An Unexpected Side Effect of COVID19: How Lenders Can Pull Ahead During the Age of Innovation and Growth in Mortgage Technology 

It is no secret that the COVID19 pandemic has turned the world as we know it, completely upside down. We now spend a majority of our time working from home, and many in-person interactions that occurred in the workplace, now all occur via Zoom or similar digital engagement. Our lives have become more socially distant, in almost every regard. One silver lining of this pandemic, however, is that it has inadvertently led to increased innovation in the field of mortgage technology. Technological advancements have solved some of the most difficult challenges that Coronavirus has created in the mortgage industry.  This is good not only for lenders and lending teams to stay productive, but also borrowers, to keep their re-financing options open and home purchase possible when it's not possible to go to your local lending branch or meet your loan officer for a coffee.

Mortgage Technology image representation

In this age of the “new normal”,  it is no secret that lenders are increasingly looking to digital solutions to connect and stay in touch with their clients during the long mortgage process.  Despite this being the “socially distant era”, borrowers still need an advisor they trust to guide them through the mortgage process.  However, now, instead of being provided with guidance in-person, this guidance must be provided virtually. During this time, online applications and solutions have provided a great way to keep lenders, borrowers, real estate agents, and other lending team employees connected during these uncertain times. A few of the virtual solutions which lenders are leaning heavily on are, “E-closing, borrower-guided appraisals, remote online notarizations, and virtual verifications”, says Jonathan Corr, the CEO of the mortgage software company Ellie Mae. For anyone who has been through a home purchase or mortgage transaction, you clearly appreciate that each headache that is taken away in the process of 100’s of steps in origination and the associated mortgage application, drastically reduces stress and time until closing.

Additionally, lenders have begun to utilize apps that allow for virtual house tours, such as Zoom, to show homes to potential borrowers.  It is clear that Zoom will become a central fixture of the mortgage tech industry, as more and more companies during COVID-19 have leaned on this app for critical communication. From the beginning of origination, all the way until closing, lenders rely on Zoom to communicate with their clients.  While Zoom covers some of the aspects of communication, there are many others that need to be addressed to ensure that questions and inquiries are addressed efficiently, documentation is requested, collected, and statused in a simple way, and all other aspects of the end-to-end mortgage process are addressed.

These new, digital solutions are already altering the way in which mortgage companies are hiring employees.  We all want the best and brightest loan officers and lending employees - and guess what?  The top performers always want to work for innovative and forward thinking firms. At present, the market is very healthy, and housing prices are remaining steady across all markets, with some in the most competitive markets still drifting upward. While home buying has become more complicated during COVID-19, the rate of mortgage applications has been accelerating. Mortgage technology has aided in accommodating this rapidly changing housing market, and adapting to the mass volume of mortgages occurring.  The low interest rates have also contributed towards this mortgage demand.  Logically, the next step in accommodating this mass volume is for mortgage companies to hire more tech specialists, engineers, and consultants who will become experts on mortgage technology, and be able to understand the process within a few months, or even weeks.  While the larger lenders are able to afford tech specialists, the small and mid-sized lenders are able to achieve similar results by licensing technology from SaaS software vendors.  Global shifts create new opportunities and as a result create winners and losers.  This is a chance for lenders to outperform their peers, if the right investment and strategy focus is developed and executed.  

These innovations, and growth in the mortgage technology sector are expected to last long after the pandemic, and many believe that they will alter the world of mortgage technology forever. Even after “shelter in place” orders are let up, and the “new normal” life resumes, these virtual processes will become the “new normal” for borrowers, lenders, and all business counter-parties. Virtual tools have the ability to help speed up the process of developing a deep, lengthy connection between borrower and lender. They will play a key role in keeping the relationship between the two groups strong as ever, even after the pandemic. As Karthik Kumar, Global Head of Mortgage Practice at Tata Consultancy Services, an information technology consulting company stated, “Our own U.S. mortgage industry has been quite innovative – not just the active exploring of all the possibilities of video-based closings, remote online notarization regulators, and investors easing restrictions, but enabling remote working by a mammoth and diverse workforce.” Perhaps one day, “a mortgage’s only physical component will be the mortgage itself!”.

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big banks, mortgage bank, digital workflow, work from home, COVID-19, Mortgage Technology, tech innovation, mortgage innovation, lenders, digital mortgage

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