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   ARTICLE   |   From Scotsman Guide Residential Edition   |   November 2017

The Mortgage IT Age Has Arrived

Information technology is having a positive impact on the industry

Hardly any part of society remains unaffected by information technology today. From software like social media and networking sites to hardware like smartphones, tablets and now wearable tech, one would be hard pressed to identify any aspect of modern life that is unaffected by technology.

Although we are increasingly faced with the negative impacts that technology sometimes can have on our lives, the positives of having a world of information and connectivity at your fingertips are numerous. In fact, the impact that technology has had on the mortgage industry in the past 10 years has been a boon to consumers and industry professionals alike.

Targeted marketing

Borrowers often report that the most difficult part of the mortgage process is choosing the right loan originator. Technology can now help these borrowers connect with highly skilled, professional, consistently productive originators through websites.

What’s more, these sites allow people to post reviews about their experiences, which provides much-needed information for potential borrowers and, essentially, provides free advertising for those originators who get excellent reviews. The internet as a whole, has become today’s version of “word of mouth” referrals, which any industry’s top professionals will tell you are the best source of business.

Data-collection technology also enables mortgage companies to provide originators with advanced marketing capabilities like being able to advertise on real estate websites in areas with high sales activity. In addition, advancements in search engine optimization allow individual originators to create highly-specific and targeted marketing materials. Website analytic and usage data can enable an industry professional to determine exactly whom (in a region) to target and at what time to post and republish a specific advertisement to maximize viewing.

If an originator wants to target first-time home-buyers in a specific neighborhood, for example, the capability exists to target online advertisements to these prospects based on their recent internet searches and other online viewing habits. Such capabilities were unheard of 20 years ago. Technology has increased the quality and efficiency of marketing for numerous industries, with the mortgage industry being no exception.

Enhanced communication

In addition to marketing advancements, technology has improved and enhanced communication. Not only does technology bring borrowers and originators together, it also connects originators with their respective lenders and government agencies.

By creating portals, software and websites that streamline the loan application and approval process, technology helps professionals access and understand requirements and guidelines more easily and improves communication during the process through e-mail, video conference and other modern means of interaction.

Government agencies are taking advantage of modern technology to augment communications, both interagency and with consumers. 

Improved communication between lenders and originators benefits borrowers as well, who necessarily become better informed and have better access to products that are well-suited for their situations. Improvements in information and communication technology create better-educated and informed financial consumers who can ask intelligent questions and help mortgage professionals guide them to what they are looking to achieve.

In addition, when borrowers understand their options, they are less likely to accuse originators of not presenting all the available options. This helps reduce frivolous lawsuits and also prevents unscrupulous characters from taking advantage of unknowing victims.

When a simple online search can provide borrowers with at least a basic understanding of the types of loans and products that exist — along with the differences between those options — they can make better decisions. Plus, more knowledgeable borrowers will push professionals to provide better service, resulting in better experiences and better results for everyone.

Augmented oversight

Enhanced communication and readily available information also are useful to regulatory agencies in their efforts to monitor lending activity and enforce safeguards intended to protect consumers from unlawful practices. Highly complicated backend data collection and reporting processes help ensure compliance by all industry professionals.

Government agencies are taking advantage of modern technology to augment communications, both interagency and with consumers. The Consumer Financial Protection Bureau (CFPB), the agency created after the financial crisis to protect consumers from predatory practices, even has a page on its website where consumers can submit complaints.

Additionally, the establishment of a system such as the National Mortgage Licensing System (NMLS), which created a central hub for originators to register and maintain compliance with industry standards and regulations, helps build a transparent lending environment where everyone benefits. Consumers benefit from being able to log on and identify legitimate professionals, while professionals benefit from having a central location to report and maintain their compliance with mandatory requirements.

Finally, technology has created a convenient and cost-efficient process for consumers to get what they need without being overly burdened and inconvenienced. Historically, when borrowers provided incomplete documents, they would need to mail or physically deliver the missing items. The originator would then have to provide the missing information to the lenders using a similar, slow method.

Advancements like e-mail and electronic signatures save time and money — not to mention paper and the environment — by providing faster turnaround times and using fewer resources. This results in increasingly pleased clients, which translates into positive experiences and return business.

•  •  •

Although technology is not foolproof and caution must be used to prevent fraud and other abuses, the overall impact that technology has had on the mortgage industry has been overwhelmingly positive. Companies often use technology — and the smooth transactions it delivers — as a key selling point when recruiting, and for good reason. The easier it is for originators to produce, the more likely they will be to stay with the company. Using technology to improve marketing capabilities and transaction time is the best recipe for success in the mortgage industry.


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