Our First Steps Toward Helping Realize A True Self-Service Mortgage Industry

In today’s increasingly digital, mobile-first world, consumers can quickly and easily shop for retail products, apply for auto loans and even open lines of credit through their mobile device. However, borrowers looking to apply for a mortgage may face several barriers when attempting to leverage the same channel. 

Since the technology exists to eradicate these barriers for the potential mortgage borrower, we must ask ourselves why haven’t we fully accepted this technology and implemented it industry-wide?


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To be fair, I’ve watched the industry come a long way in leveraging technology to help improve the origination process. We are closer than ever to realizing a fully digital, frictionless mortgage origination process as advances in applications, workflows and automation continue to move the needle in the right direction. Yet, when it comes to comparing the digital consumer experience of the mortgage ecosystem with that of other financial services such as retail banking, there still exists a chasm in terms of efficiency and performance. 


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For starters, we should aim to build upon the recent technological shifts witnessed in the industry. Advancements such as automation and open API’s enable us to better streamline the origination process. Should we opt to pair these capabilities with technology that facilities the use of third-party data and mobile POS technology, we can expect an expedited experience that reduces the cost to originate and saves time for all parties involved. 


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Some examples of this would be Freddie Mac’s Automated Collateral Evaluation (ACE), Freddie Edge and Fannie Mae’s Day 1 Certainty®, which already exist and are in use, effectively reducing (or even eliminating) the need for a full appraisal on certain properties and refinance loans in the first place. For example, the Day 1 Certainty program and Freddie Edge automate the income, employment and asset validation process for lenders, making it simpler, faster and more user-friendly. By opting in with Fannie Mae and Freddie Mac, lenders can then work with third-party data vendors to retrieve and review all pertinent data. This reduces both the risk as well as much of the paperwork for both borrowers and lenders. 


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For anyone asking where to start, I recommend beginning with refinances. Refis offer great opportunities to help accelerate the application-to-closing timeframe. For today’s borrowers, the average time from application submission to closing remains around 45 days. However, we can generally reduce this to just 10 days or less, providing a major timesaver for borrowers and a boost in operational efficiency and profitability for lenders given much of the infrastructure is already in place.

In the not-so-distant future, we can anticipate a greater acceptance of improved digital technology to move a potential borrower through the mortgage origination process quickly. Likewise, lenders leveraging better workflow advances and GSE programs, such as those previously referenced, may further reduce friction in the process, enabling them to successfully underwrite the loan and prepare for closing in as little as 48 hours. Not quite the 30 minute/end-to-end experience of a mobile car purchase, but a vast improvement over today’s current standards.

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