LEW SICHELMAN
THE MORTGAGE SCENE
Virus Put Mortgage Tech On Viral Fast Track All aboard! The technology train is leaving the station. BY LEW SICHELMAN | CONTRIBUTING WRITER, NATIONAL MORTGAGE PROFESSIONAL
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n many respects, the Mortgage Bankers Association’s annual convention in October, virtual though it was, was just like the good old days. It made news. Mark Calabria, director of the federal Housing Finance Agency, said his office was proposing a rule that would prevent charter creep by Fannie Mae and Freddie Mac. That was a hot button some years back when the two government sponsored entities, aka The Agencies, started moving into what traditionally was the purview of private enterprise. Calabria also said the FHFA would move forward as planned to require Fannie and Freddie to extract a 50-basis point “adverse market” refinance fee starting Dec. 1. And the CEOs of the two GSEs, David Beckman at Freddie and Hugh Frater at Fannie, defended the move, with Frater saying that it was required by law. “The GSEs are shouldering significant risks associated with the pandemic,” Fannie’s fearless leader said. “As the principal
risktaker, we have to price that risk appropriately.” He also said the fee shouldn’t impact anyone wishing to refinance because it “can be absorbed” by their lenders. Meanwhile, Kathy Kraninger, director of the Consumer Financial Protection Bureau, said her agency is extending the GSE patch until a new standard is in place. That means Fannie and Freddie can continue purchasing loans with loan-tovalue rations that exceed 43 percent, basically indefinitely. “We believe that a pricing threshold is a more realistic assessment of an individual’s ability to repay,” Kraninger said. And Ben Carson, the former Johns Hopkins surgeon who’s now the Top Dog at the Department of Housing and Urban Development, said the Federal Housing Administration is extending by two months the date under which financially struggling home owners can apply for relief. Originally, requests for forbearance had to be received by Oct. 30. Now, owners have until Dec. 31 to ask for help.
TECH TALK These actions drew significant media coverage in both the popular and trade press. But one session that didn’t make the news, at least not anywhere I’ve seen, was the one on technology, specifically its rapid expansion as a result of the pandemic. And the gist of the discussion was that if that you’re not on board, you’d better be, because the tech train is leaving the station. The good thing is, you don’t have to jump into artificial
intelligence with both feet. “Don’t be afraid to start small,” Nima Ghamsari of Blend told the virtual audience. “It’s okay if it takes a while. It will improve over time. Perfection is the enemy of getting something going.” Actually, it’s rather surprising that some lenders haven’t yet automated their systems, at least not to the extent possible. As Rich Gagliano of Black Knight noted, the industry has been on the digital journey “for multiple years now.” And as a result, Paul Anastos of Guaranteed Rate said, the technology available today is “so much better.” The panelists suspected that one reason companies have shied away from going full bore on technology is the George Orwellian fear of losing control of the process to the dreaded machine. But just as the conventional “human” way of lending is based on a particular set of rules, so, too, is AI, they pointed out. And those precepts can be set to each individual lender’s criteria – or, as Joe Tyrrell of ICE Mortgage Technology said, “a particular lender’s risk appetite.” Perhaps another reason some have been slow to adjust is the notion that adoption takes too long. But a report from consulting firm McKinsey & Co. shots holes in that theory. In a recent survey, it found that COVID19 has accelerated the adoption of digitization and enabling technologies across many disciplines by up to seven years.
FAST TRACK The most mindblowing finding is the speed at which acceptance has occurred, according to one report.
