Mike Lyon, Executive Vice President 2021 will look nothing like 2020.
This is the easiest prediction. Nothing can top the triple whammy of a polarizing election cycle mixed with social justice issues, balancing precariously against the backdrop of a pandemic. These factors combined to curtail face-to-face activities, particularly in large urban settings. Many small businesses suffered, but businesses that innovated contact-less interactions and transactions (like Amazon and Zoom) and those that embraced them reaped big rewards in the new stay-at-home economy.
2021 will allow for some normalcy to creep back in. But, as Dorothy said in The Wizard of Oz, “I've a feeling we're not in Kansas anymore.”
In other words, the lessons learned from social distancing and the advancements or retrenchments made to accommodate it will continue.
The mortgage lending industry will finally be dragged kicking and screaming into the 21st century (the early 21st century, that is).
No industry has done more for paper manufacturing and cutting-edge fax machine technology than mortgage lending. It seems as though the mantra for many players in this space has always been, “Yep. It’s kinda broke and clients hate it. Don’t fix it.”
Clients won’t tolerate this broken process any longer. Their expectation bar for great service combined with simplicity and ease through technology has been raised based on their experiences with virtually EVERY OTHER client-facing industry.
(Seriously, in what world can you perform an online surgical consult with your doctor, and schedule outpatient hip-replacement surgery – yet you still have to meet face to face with a notary and sign a stack of mortgage documents slightly smaller than the federal budget bill?) Clients demand efficiency. Smart lenders who understand and deliver it will flourish.
Fully digital mortgage lending will become a reality.
The holy grail of mortgage lending is a fully digital experience – starting with the initial application, then cruising through the closing and moving seamlessly to the mortgage servicing platform. A few savvy lenders are finally going to make it happen in 2021. It will start off small, but it will become mainstream in 2022. By 2024, paper closings will be as rare as rotary phones.
The pursuit of more automation in mortgage lending – and everything else – will continue.
Taking a mortgage application and moving it through origination and closing is messy. There are many moving parts, which are managed by humans. And humans make mistakes.
Let’s use the homeowners insurance (HOI) verification process as an example. Today, a mortgage processor must obtain proof of HOI for every mortgage applicant. This entails: 1. Calling the applicant. 2. Obtaining the insurer’s name. 3. Calling the insurer. 4. Providing the insurer with the applicant’s permission to release insurance information. 5. Waiting to receive a fax (yes, a fax) of the insurance information. 6. Then manually inputting the insurance information into the lender’s loan origination system.
Technology can remove – or at least reduce – these kinds of messy, error-prone steps in mortgage lending by integrating successful practices or platforms from other industries. Knowing this, we developed Nexsys Clear HOI℠, a digital platform that transforms this process from one that typically takes days into one that’s completed in seconds and virtually eliminates the chance for errors.
As every element of the lending process is put under the technology microscope, we’ll find more and more advancements and automations that will make it faster, less tedious and far more accurate.