The Mortgage Industry’s Technological Future



Is the mortgage industry evolving with technology or will a technological revolution completely change the landscape? Right now, there is opportunity for either to happen or for the two to merge. Loan originators and the mortgage industry as a whole is legendary for being conservative. That conservative approach went awry in the lead up to the 2008 foreclosure melt down. The most glaring result has been a staunch return to conservative loan qualifying. In the meantime, most of the business world has embraced ever-advancing technology that is today evolving into artificial intelligence and machine learning.

The Mortgage Industry is Slow to Embrace Fast Advancing Technology

While the majority of the world lives online, the loan origination industry is barely moving to a mostly online platform. How will the continuing online data breaches and specifically the Equifax credit data breach affect the mortgage industry’s move towards integrated online technology? Based on near and long term history, the move to fully online transactions is likely to be a slow evolution rather than an industry changing revolution.

Not that some individual businesses haven’t attempted the leap but the results have been less than stellar. For instance, Quicken Loans’ move to a fully online mortgage process didn’t exactly take the industry by storm. And it’s unlikely that a new startup will uproot the industry considering the many governmental complications, regulations, traditions, and rules that have long existed and are not likely to become less cumbersome any time soon.

However, technological change is inevitable considering what has already happened in other industries embracing machine learning and artificial intelligence (AI). This technology seems to be a natural fit in guiding mortgage applicants to the best fitting products or developing new mortgage products that match changing consumer needs.

The technology is here today. Ridesharing services such as Uber use AI algorithms to quickly analyze traffic congestion, traffic flow, quickest route, and other information to best match drivers and riders in seconds. Google has invested massive resources developing AI algorithms matching individuals to customized search results. Leading this technology enables Google to remain the dominate search engine in a highly competitive industry. It doesn’t seem even a little farfetched that loan originators should use related technology to match borrowers to mortgage products, generate high quality refinance leads from existing databases, and suggest new products closely meeting market needs. The question is: why isn’t this happening on a larger scale and when will it start becoming more common?

What Mortgage Industry Participants See Coming Soon

The Lenders One® Cooperative, a national alliance of independent mortgage bankers, polled participants at its annual Summer Conference on their use of technology and their expectations for the market in the year ahead. This poll was taken prior to the Equifax credit data breach that is likely to skew the technical future of the mortgage industry.

  • 74% indicated that they are very concerned about the protection of customers’ personally identifiable information during the mortgage originations and trading processes.
  • 56% said that improving operational efficiencies was the most influential catalyst for investing in new technologies.
  • 53% see technology as positively impacting traditional mortgage trading processes with more than half of the respondents identifying streamlining workflow as one aspect of the current process that could be most enhanced by a technology platform.
  • 26% see technology offering a better customer experience.

Michael Kuentz, President of Lenders One, said, “One of the most critical challenges our members face is recruiting and training talent who can carry their businesses into the future. Robust training programs are critical, and we are seeing great success in pilots with our members to explore new methods for attracting talent from outside of the industry by identifying the key traits needed to thrive in a digitally driven mortgage environment.”

What do you see as the best or future uses of technology in mortgage industry? Please comment with your thoughts and experiences.

Author bio: Brian Kline has been investing in real estate for more than 35 years and writing about real estate investing for 10 years. He also draws upon 30 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest. With the Pacific Ocean a couple of miles in the opposite direction.

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