Mortgage origination options are broadening. The one-size-fits-all product doesn’t exist as borrowers’ needs are too diverse. These days lenders are addressing that diversity which allows qualified borrowers to obtain financing and experienced investors to invest in income-producing properties.
And for good reason. The mortgage lending market is fiercely competitive with traditional players and financial technology startups vying for business. As a result, new offerings are emerging. Lenders are beginning to rely on different data points to assess the creditworthiness of a borrower and speed up the approval process. For all borrower profiles, they are curbing the time it takes to decision and move the borrower to closing.
A significant area of focus has been on creating lending products for small business owners and those who invest in income-producing properties. By analyzing the cash flow of a business or an investment, lenders can clearly ascertain how the borrower is managing their business, understand their ability to manage their finances, and in the instance of property income, understand the ability for the borrower to utilize the income to offset their liability. These options make it easier for the self-employed and business owners to get approved for a mortgage, and additionally, allows access to credit outside of the traditional agency model. It also opens up an additional market for originators. With the number of gig economy workers and freelancers growing, that presents a whole new opportunity as well.
Originators can support their local economy by providing businesses in the neighborhood with mortgages. That means businesses can stay in a community and grow, a win-win for everyone.
Technology will continue to play a bigger role in the origination process in the coming months and years. Using machine learning, artificial intelligence, and data analytics, originators will be busy integrating all sorts of technology that can streamline operations and shorten the mortgage process. Digital programs that help originators quickly determine what products are available to individual borrowers and what’s needed for eligibility are already emerging. At the same time that originators are integrating all of this technology, they will have to train their staff on using it. It doesn’t matter how good the technology is if no one in the organization knows how to make use of it.
Education has to go beyond products and services, however. Originators need access to tips and advice on how to reach undeserved borrowers and which products are available to serve their unique needs. Technology can’t act in a vacuum. Underpinning all of this is the melding of technology with an educated team of originators.
It’s a good time to be a mortgage professional, but it’s not enough to simply hire more staff to meet the growing demand. On the technical side, they have to be educated on new technology, risk analysis, and how to manage costs. On the growth side, they have to know where the market opportunity lies and how to address it. Scaling business by adding people or technology without combining the two is not only risky, it’s inefficient. A better option is a well-educated team, focused on meeting the needs of customers, armed with the right tools. That will always breed success.
About The Author
Lisa Schreiber, Senior Vice President, Non-QM for NewRez LLC, is a proven leader and industry innovator with over 30 years of success, experience, and dedication to the diverse field of lending. Along with her position at NewRez, Schreiber has held senior management positions with major financial services companies such as Sprout, Home Point Financial, Ellie Mae, TMS Funding, NetMore America, American Brokers Conduit and Bank of America. She is recognized as a valued speaker within the mortgage industry, providing expertise through her writing and participation at industry events.