Mortgage Technology: Where Are We?

Loan Officer: “I’m going to email, FedEx, or fax you the 20 to 30 page loan application.  All you need to do it print it out, sign and date all the pages, and email, FedEx, or fax them back to me.”

Borrower: “That seems like an enormous amount of time and work. Isn’t there an easier way?”

Loan Officer: “Unfortunately, no. Oh, and also, I’ll need you to email, fax, or FedEx all your supporting documentation.”

Borrower: “Ouch!”

Sound familiar?

Until just a few years ago, other than being face-to-face, this was the only way to get the signed application and disclosures to a borrower and back. That’s how it was. The mortgage process was an arduous one.

In an industry that has long been paper driven, where documents easily get misplaced, some companies are starting to get the hint that the time for technology updating has arrived.

It’s a slow process, but things are improving. The first sign of light came when the loan package could be emailed to the borrower and electronically signed. This sped up the initial process because the borrower didn’t need to print out the documents and then send them back.

Unfortunately, not all documents can be electronically signed. Social Security Administration forms and the IRS 4506T form must be wet signed. What’s interesting is that it’s okay for borrowers to fax or email these documents back, but not okay for them to be e-signed.

Because many people feel email isn’t secure and is too risky for sending personal information, we’re pleased to see borrowers can now upload a loan package directly through a secure website, with documents labeled. This helps the broker/lender organize the file for underwriting.

Many lenders continue to live with antiquated systems that were tech marvels at one time. But they have long since fallen behind new lender platforms. While some in the industry have invested in process-improving technology, many lag behind.

One driving force for technology updates are the ever-changing mortgage industry regulations. Old systems simply can’t handle the new requirements. This doesn’t just drag the process, it can bring it to a halt. Technology isn’t cheap. Upgrading or creating new processes and systems can take a huge investment and a lot of time. In the end, many lenders want to spend the least amount of money for the fix, but what good is the process if it doesn’t work?

While the mortgage market is still highly fragmented, regulated, and complex, I believe that thanks to technology, the lending industry is headed in the right direction. But until the industry has evolved, consumers have a decision to make. They can live in the past and do things the old-fashioned way, or they can choose to work with a modern, evolved mortgage company who is maximizing today’s technology and providing the best options the market has to offer.