We are in 2017, in a year where everything is wired to the internet. Data and information exchange is now measured in bits per second. Information used to be gathered from a huge room full of books back in the days. You needed to scan over each card catalog and go through aisles of bookshelves to get to that one piece of information. Today, all the knowledge in the same room can fit in one tiny storage device, easily accessible in a few clicks.
The mortgage industry is somehow left behind. Much of its work is still done on paper. Many mortgage institutions, however, have started to integrate modern technology to make the work quicker and more efficient.
New Technology Will Transform the Mortgage Landscape
Integrating new technology into the mortgage process will make the experience better not only for mortgage institutions but, most importantly, for its consumers. The emerging financial service sector is driven by clients’ demands for faster, more accurate and economical ways in providing services related to trade and finance. This service industry is called FinTech or Financial Technology.
Digital financial technology will help evolve the mortgage industry.
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Streamlined Mortgage Process
It takes about 50 days to complete a loan process. In the digital world, 50 days is like forever. The process takes so long because most of it is done manually. Technology will help hasten the work needed to be done. This also helps eliminate the need for paper.
Information exchange from the borrower to the lender and vice-versa becomes faster. Mortgage providers can also offer real-time assistance to their clients. The process becomes less tedious, the accessibility to services and information is enhanced.
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Regulatory Compliance
There are many federal regulations and guidelines mortgage providers need to adhere to. These regulations ensure responsible lending practices and educate loan applicants on what they are about to go into early in the loan process.
Fed regulations can change anytime. Current ones can be replaced by new ones. Additional regulations can also be formed. This dynamism can be a burden for lenders and be a source of confusion for borrowers. It would be easier for mortgage providers to comply with the changing regulations if new technologies are easier to configure should the need arise.
The ‘Know Before You Owe’ disclosure rule makes it easier for borrowers to understand the loan. This disclosure replaces four long disclosure forms with two forms that are comprehensive. But to lenders, it can be so laborsome to come up with a written estimate within three business days as required by law.
Digital technology can help ease this difficulty through process automation. It will replace the need for human-dependent mortgage processes done on paper. The moment an applicant submits the necessary information, the system will automatically process these data and generate a disclosure. It also eliminates the chance of human errors, thus increasing accuracy and reliability.
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Enhanced Consumer Experience
There is no easy way to look at the mortgage process. It requires effort from both ends of the spectrum. From documentation to underwriting, to closing all these are paper files that need to be done. It can be exhausting for applicants, stretching the days longer and longer before the loan finally comes to a close.
Meanwhile, mobile technology enables omnichannel, direct to source connectivity that speeds up the process. The information can be independently verified from the source, eliminating duplicate requests or eleventh-hour add-ons.
Also, borrowers can have real-time access to relationship managers with just a few taps. Consumers are given more options on how they can interact with mortgage providers.
We have yet to fully experience these positive changes in home originations and the mortgage industry. More and more mortgage institutions recognize this need to provide better service to its clientele through modern technology.
