Fintech Saved the Mortgage Industry

SPONSORED EDITORIAL

Fintech Saved the Mortgage Industry

BY SHAKRIA HALL

Here we are, a few months away from 2021 and the pandemic is still going strong. Who would’ve guessed we’d still be in this situation back in March? As many of us look toward 2021 as a welcome reprieve from the chaos, it’s also an opportunity to reflect on how the industry adjusted to the curveball that has been 2020. At this point, in some ways, there has been a collective sigh of relief.

Pleasant Surprise

Thanks to historically low rates and renters seeking more space for less money, new mortgage applications hit a level not seen since 2008. To be specific, purchase applications are up nearly 20 percent from a year ago and refinances up more than 120 percent. Lenders have struggled to keep up with the demand due to COVID related staffing issues and the need to accommodate a contact-free purchase model. Gone are the days when we nervously asked ourselves, “could we be facing another real estate crash?” In addition to tighter borrower standards, no-documentation loans are non-existent, and borrower credit profiles are stronger. We now understand that what happened in 2008 and what’s happening as a result of COVID is an apples to oranges comparison.

Technology Saved the Day

The industry’s ability to adapt to this new normal by incorporating technology, empowered originators. Whether you’ve embraced technology at the front end with a robust point-of-sale (POS) or your lender has decided to adjust their rules and offer virtual or hybrid closings, the message has been clear; you may be driving the car but technology is the engine. Nothing moves without it.

Elements of a Contact Free Mortgage

Initiating the relationship with the POS sets the stage for the high-tech origination experience being offered. Consider this, the application is completed when and where the borrower is most comfortable. Via the POS, they've given you permission to pull credit and they've even used Verification of Assets to automatically upload their bank statement data. Thereby eliminating the need to track down paper copies of financials.

Borrowers have come to expect a process without physical contact. For instance, safety concerns have caused a 200 percent spike in remote online notarizations. A demand that has been particularly high in Texas and Florida. These new processes have answered buyers' and sellers' calls for a shorter, less stressful, and less costly sales process. Currently, 37 states approved remote online notarization, and the remaining 13 offer hybrid options.

Updated guidelines have been implemented to ensure contactless appraisals are possible as well. They've implemented a combination of techniques like desktop appraisals, virtual appraisals, or for the more tech-savvy, borrower/ appraiser webcam sessions via Skype, FaceTime, Zoom, or other tool. Another collaborative approach is asking the homeowner to take photos of the home and send digital copies to the appraiser.

Most of the technology mentioned have existed for years; it was just largely ignored. With all the heartache that 2020 brought us, it just may have given the industry the technological kick in the pants it needed.

Shakria Hall is brand marketing manager at Calyx, an established provider of compliant mortgage software solutions used by banks, credit unions, mortgage lenders and brokerages nationwide. She may be reached by e-mail at Shakria_Hall@CalyxSoftware.com.