As published in Scotsman Guide's Residential Edition, March 2007.
NAMB's technology subcommittee is designed to help brokers learn about and use technology effectively. Co-Chairmen John Anthony -- owner of ACA Mortgage in Mechanicsburg, Pa. -- and Michael Vernon -- president of Follow Your Customer in Greensburg, Pa. -- elaborate on the state of mortgage technology.
As technology in the mortgage industry advances, the consumers' role in the mortgage process changes, too. John Anthony and Michael Vernon explain how.
What does consumers' increasing reliance on the Internet for research and for loan applications mean for smaller brokerages?
JA: You can't replace the hands-on customer service and caring that comes from your local mortgage broker. And the reality is that many times what the consumer finds online can't be delivered because they're not dealing with live, up-to-the-minute prices or a live person. I think most mortgage brokers already have the capacity to take an application online, so the playing field there is actually relatively level.
What are the top three technological advances for today's mortgage broker?
MV: I think that the technology of real-time information for consumer's benefit would be No. 1. Now that we can increase our speed time, we can take less time to get to the lock period, which effectively gives a better price to consumers.
No. 2. is technology with telephones and communication ...quot; for example, phone systems that notify you that you have current calls or the ability to forward calls with your smart phones so you can respond to consumers if you're on vacation.
No. 3 is for the technologically savvy mortgage brokers: any programs that allow them to communicate with another computer to do any type of sales presentation with a client without actually having to meet face to face. What do some of these advances mean for consumers?
JA: I'm finding more people who are doing their research online are quizzing me on things they never would have known to ask me about before, which is spectacular. I don't have to spend as much time educating them. So as technology gets better, the information flow will force all of us to be better at what we do.
-- Melinda Young
How are technological advancements affecting the way brokers close loans?
Michael Vernon (MV): Things have evolved to the point where loans can be done almost completely paperless outside of the original documents that consumers must sign.
John Anthony (JA): Ultimately, this technology allows us to be more effective and efficient at our job. It's creating a reduced expense base for the consumer.
Are universal paperless applications impossible?
MV: I think the only impossibility to universal-paperless availability isn't about the technology; it's about the people who are willing to embrace it. And I think that the industry's movement into that area will be driven mostly by the lender base and Fannie [Mae] and Freddie [Mac].
What are the biggest technological challenges for brokers?
MV: The ability for the consumer to create fraud has become easier with the lower cost of computers, software, scanning and other devices to manipulate information.
The good side of that is that we can research and check information more efficiently -- for example, to get a copy of tax returns from the [Internal Revenue Service] faster and to verify information through the courthouse quicker.
Another hurdle is keeping mortgage offices as technologically advanced as possible. It's challenging to keep up with all the security that protects consumers' information, to ensure that it's efficient and that it will safely store and protect documents.
JA: Yes, that's a pretty tall order. When people break into title offices, instead of stealing checks, they steal the computer, because it contains millions of dollars' worth of people's personal information.
What can be done to keep this from happening?
MV: Primarily, make sure that all the passwords you use are secure. The biggest mistake brokers make is to type all their passwords in one place that anybody can pull up.
What would you like to see happen with mortgage technology in the next five years?
MV: Working toward a uniform code of electronic information is at the forefront. I'd also like to see a digital way to sign documentation. We should strive to find a way of securing e-signatures that are authenticated while still protecting the consumer.
JA: The notaries are already scanning people's thumbs to identify who they are in some closings. And the industry has already had a test case or two where they've signed electronically. There are a lot of moving parts to it, but we see it coming down the pipe, and it definitely will be a benefit.
Melinda Young is an associate editor at Scotsman Guide. Reach her at (800) 297-6061 or email@example.com.