August 14th, 2017 5:06 AM by Jackie A. Graves
Technological advancements lend themselves to countless
consumer-facing industries, even transforming ones such as hospitality, travel
But if you can manage numerous accounts
online without ever having to sit down for a face-to-face conversation with
another human, why is the
process of getting a mortgage so different?
The real estate financing process is often expected to be a
series of in-person meetings at banks or other offices, complete with scanning
documents of financial background information and a slow approval process.
One possible reason the mortgage industry
has been slow
to adopt new technology is because the housing crisis caused lenders
to clam up, explains Tom Rhodes, CEO of Sente Mortgage, a Texas-based lender
that opened just in time for the housing bubble burst in 2007.
But those days are rapidly changing.
Lenders are beginning to embrace more new technology, and new lenders are even
entering the game based around an automated platform.
“In the last 18 months, we’ve really
started seeing where things have gotten easier,” Rhodes says. “Companies are
using big data, companies are using more automated systems and processes and
using technology to produce a smoother experience.”
Here are four things you should know about
how technology is now playing a part in your mortgage process.
Options go beyond the online
form. An important part of the mortgage industry’s evolution is
automation – not just allowing you to fill out forms online, but also granting
access to financial and employment backgrounds without requiring repetitive
work for you.
Rather than having to provide all the same
detailed pieces of information you would when filling out a paper form, your communication
with the lender is more about borrowing programs that would fit
best and not what details you have or haven’t provided yet.
By streamlining that process, mortgage
lending moves away from a transactional business and “turns into a relationship
business,” says Dom Marchetti, chief technology officer for loanDepot, a
Other more traditional lenders – banks in
particular – are automating
their processes as well. One way is by utilizing Roostify, a
mortgage technology company that provides an automated platform for lenders.
“It creates an online experience for the
consumer, from potentially the moment they express interest in learning more
about the lender’s offerings to the moment that they sign their final closing
documents,” says Rajesh Bhat, CEO and co-founder of Roostify.
From there, the online platforms are also
designed to provide detailed updates about your application and the approval
process and often allow you to e-sign documents so you avoid adding new
meetings to your existing list of sit-downs
throughout the homebuying process.
Face-to-face options remain. Of course, there’s
no way every consumer looking to purchase a home is going to feel comfortable
getting a mortgage online, whether it’s a tech-literacy issue or simply because
you may enjoy an in-person conversation.
“Every bank needs to provide that option to
support consumers who don’t wish to engage online at all – you have to be able
to support that,” Bhat says.
Even the lenders focused on automated
processes, such as Rocket Mortgage by Quicken Loans or loanDepot, offer human
interaction to help you each step of the way.
“We get to interact with you on your
terms,” Marchetti says of loanDepot’s platform.
Security and protection is a
major focus. We hear almost every day about a new data hack in a
retailer, firm or even hospital that has compromised consumers' private
information. Knowing how much valuable information is compiled
during the mortgage approval process, companies are taking measure to reduce the
chances of that happening.
Especially for companies specializing in
the tech aspect, securing your information is a major part of the job – and
it’s an ongoing process. “When information comes into our solution, we are
effectively encrypting everything at rest and in transit,” Bhat says.
Marchetti explains that loanDepot has
placed particular focus on keeping hackers from reaching client information,
having blocked repeated attempts to access company data. Key to protection is
segmentation to avoid a mass download of information, he says, so “if you get
access to a piece, you don’t get a whole.”
But the greater level of protection isn’t
just for the consumer’s benefit – the automated process itself allows for heightened
transparency between the borrower and lender, cutting down on
potential for fraudulent information being given to the lender, Marchetti says.
The industry is poised for tech growth. Even
with the progress of the last year and a half, the mortgage industry is likely
in just the beginning stages of its evolution to catch up with the travel,
banking and other tech-transformed industries, Rhodes says.
He points out, in particular, that while
employment verification for homebuyers has been automated with Sente Mortgage
and other companies, it doesn’t work with all types of employment yet. “The box
is still pretty small,” Rhodes says.
But with the ball rolling, it’s only a
matter of time before more people qualify for a fully automated process, and
the mortgage industry loses its antiquated reputation. But the general practice
of shopping around for a mortgage should remain the same – work with the lender
the right mortgage program for you.
“We’re still in the early days of this. … I
think it’s going to be a radical improvement in the process,” Rhodes says.
Homebuyers and other borrowers can
reasonably expect for automation in verification of employment and financial
history to expand to cover more people as technologies develop and a larger
portion of the industry gets on board.
Further behind-the-scenes automation means
the loan approval process can be streamlined and made more accurate. Already,
Fannie Mae's Automated Property Service uses its extensive information to
provide a predicted property value and a confidence score to be used as a
factor when considering eligibility for the Home Affordable Modification
Program. As more major industry players support a more transparent process,
small and large lenders nationwide will be able to automate more as well.
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