Instantaneous has become a baseline expectation. We get annoyed if a webpage loads a nanosecond too slow so the idea that it takes mere weeks to get mortgage financing is not going to get a wow from anyone. The basic process for securing mortgage approval has not really changed much in the last 25 years. Information and documents are gathered, forms are filled out, an appraisal is done, forms and docs are reviewed; approvals are issued. This process has been enhanced through technology and is now much faster, more accurate and more objective, but the basic step-by-step process is not much different than it was back in the old days when I would meet borrowers at dining room tables and actually use a pen to fill out all those mortgage application forms.
Lenders use all kinds of technology to originate, process, approve and fund loans, but these are tools that actual humans use to perform an individual function in the mortgage approval process assembly line. Automated underwriting engines like Fannie Mae’s Desktop Underwriter (DU) or Freddie Mac’s Loan Prospector are how loans get approved, and the findings that result are the guides to how loans are documented and corroborated. Every automated mortgage loan approval requires eyeball review of supporting docs and every other possible aspect compliance. Technology stacking has not yet resulted in an APP that delivers the mortgage getting experience instantaneously, completely and without human intervention.
Uber is Uber because we can order up a ride, pay for it, and what we want is delivered quickly and with no additional input. Mortgage Uber is obviously much more involved and requires the protected integration of lots of moving parts, but whoever gets it figured out first, wins.
I confess that I am a newly converted Gary Vaynerchuk disciple, mostly because his lens is grounded in common sense and he seems to be able to access more brain cells that most of us. At least that’s my take, and one of his basic tenets is that the #1 asset that most people value is their time.
Delivering a mortgage that is ready to close in mere weeks takes too much time for consumers accustomed to instantaneous everything in most other aspects of their lives. But most lenders are only focused on improving and streamlining the same application-to-closing process that has been used since before personal computers were added to work stations.
Right now the mortgaging process uses a menu of technologies to perform the various tasks necessary to create a successful and salable loan, but the master technology needed to integrate this symphony without help from humans, is yet to come online.
Even the technology heavy online lenders have yet to get this instantaneous integration thing figured out yet, although I suspect one or two of them are getting close. The institutional structure of most traditional mortgage lenders is focused on streamlining the “we-have-always-done-it-this-way process.” It is not a nurturing environment for the kind of dramatic refocus and change to be at the forefront of what is coming. The great big household name lenders are too management heavy to effect the kind of revolutionary change to make instantaneous technology integration happen. They certainly have the resources and the wherewithal, just maybe not the D-Day-esque vision to effectively deploy.