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Mortgage industry's tech future is evolving

Technology advancements were one of the hot topics during the Mortgage Bankers Association (MBA) annual convention in Denver earlier this week. Kevin Wall, president of First American Mortgage Solutions, spoke with Scotsman Guide News about trends in technology, the digital mortgage and the future of the appraisal industry during a break period at the conference.

In your opinion, how well is the mortgage market responding to technology change?

kevinwallWhen you look the evolution of the Fintechs [financial technologies] that are coming up, especially on the front-end of the application process, there is quite a bit of adoption on the part of lenders to improve their customer experience. The expectation [of a better experience] becomes set [and] should continue through the life cycle of the mortgage origination and servicing process.

While you are seeing technology on the front end as the first market, you are starting to see it in other places from appraisal into title. You clearly see it in [Fannie Mae’s automated underwriting system] Day 1 Certainty and some of the automated access to information around income and assets. I think that will continue to expand into collateral and other aspects of the mortgage market.

What has been changing?

It is two things. The idea that [the origination process] needs to be easier than it is, that has always been out there. You may give the millennials some credit. You would certainly give lenders some credit for allowing more to happen on your phone versus on an application. There is that, and there has been significant investments in originators and servicers, and lenders, starting to shed some of their legacy technology and reconfigure the technology for more modernization of the application. There has been both a philosophical advance as well as a technological advance, [which] has facilitated this recent adoption and movement toward a more automated online and digital process.

Is a lot of this driven by regulations and reporting requirements?

I am actually excited to say that I don’t think it is regulation-driven for a change. I see this as an advancement. The industry finally has a moment to think, how do we want to run our business? How do we want to interact with our customer? And being able to devote time and energy to that.

Has there been a true digital mortgage produced to date?

We hear of one or two here and there. I think digital mortgage will continue to evolve. I don’t see the technology and the adoption being the problem, or the challenge. We still deal with 3,600 independent [government] jurisdictions all around the country, and their independent views of what will they support, what will they enforce, and how will you be able to coordinate the complexities of that. I know [digital mortgages] have been in certain markets, but we have not proven the scaleability of that, primarily due to that jurisdictional challenge.

Do you think that it is over-exuberant to say that, within the next three to five years, the digital mortgage will become a mainstream product?

I don’t know if it is over-exuberant. That aspiration should drive us as an industry to become more modern. I couldn’t give a deadline to say, by this time we will certainly be 100 percent digital. That aspiration needs to continue to motivate us as an industry to continue to progress, but I don’t know the over-under [bet] on when you would finally get there, in terms of the mainstream.

Switching to appraisal issues, do you perceive the much-discussed declining numbers of trained appraisers as a real issue?

It clearly is a declining field in terms of the number of active participants. There are things being done to address that. There is a bit of a momentum shift around the requirements in order to become a certified or licensed appraiser. I think that will help. The industry’s [willingness] to embrace trainees and really create a form of apprenticeship and mentorship in this profession will help. Certainly, the automation and modernization of the process will certainly attract the next generation. But, I think, if we stay fixated on the current way that we do appraisals, we might have a shortage.

Is the greater role of automated appraisals, particularly in home-purchase deals, a good thing or a dangerous thing?

I think it depends on your definition of automated appraisal. Data will continue to play an increasing role in creating a valuation on a property, whether it be for refi or for purchase. The technology enabling multiple stakeholders in the process to collaborate will play an increasing role. There will still be a need, and I think it is consistent with what we hear from investors and lenders, for certain properties to have not only physical eyes on the property, but an inspection of the property. The complexities of properties is really something to be dealt with. The role of the appraiser will continue to evolve.  

In other words, robots are not going to take over?

I never want to say never. We see cars being manufactured largely by robots today. I think the natural evolution of enhanced data through technology enabling a skilled workforce, whether that be an inspector, whether it be an appraiser, whether it be any real estate professional, will be enabled much more greatly with the technology advancements that we are part of today. 


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