Breaking the Myth: Mortgage Technology as an Ongoing Journey
One of the things that I think a lot of financial institutions struggle with is they look at technology as a finish line. I have a project, I implement it and I’m finished. And really, that’s not the case.
The best technology platforms out there are really a service that are constantly refined, reporting is constantly refined, workflows are automated, communications are automated, as far as letting people know via text or an email when something’s happened. And so making sure all the parties are alerted and it’s transparent really becomes important. And a lot of that is not just the technology backbone, but how is it configured and how is it supported?
So users are progressing through the system in parallel instead of sequential. And that’s a fancy way of saying in the old days, one person touched the loan until they handed it off to the next person and they would work on that loan and the checker is checking the checker, checking the checker.
Now with today’s systems, there’s a process where it’s parallel workflow. So things are happening at the same time. Different specialists are working on that loan. And once it’s been completed, the work, one person checks it and signs off on it. So there is a seamless process where all these different components of a home loan are getting done simultaneously. And that gives you the service levels where loans are closing in 10 to 15 days instead of 30 to 60 days.
FACTS:
The top cost-effective companies originate mortgage loans at nearly half the cost of the industry average and ~2.4 times less than the bottom 25% performers. Source: Freddie Mac Single Family 2024 Cost to Originate Study.
Average home loan costs have gone up over 35% over the past three years alone. Source: Freddie Mac Single Family 2024 Cost to Originate Study.
Median productivity – measured as mortgage loans closed per retail / consumer direct production employee is 1.1 loans per employee. Source: Mortgage Bankers Association 2024 Q1 Quarterly Performance Report.
