Garth Graham, partner at Stratmor Group and one of our most noted bloggers on this site, is a noted ironist but I took away from his MTC keynote a stat served up without snark. Noting that the mortgage tables have turned from refinancings to purchases, Garth said that purchase mortgages are laggards when it comes to electronic mortgage adoption.
He said just 22% of purchase loans have come in recently through the consumer direct channel, meaning four of five purchase loans come via the traditional retail, brick-and-mortar channel.
I was thinking of further ironies as I prepared to kick off the conference, sponsored by National Mortgage News, with a retrospective and forward look at mortgage technology (this was our 15th MTC). File these under everything old is new again, I suppose.
Back in the days when we started the MTC (1998), integrating servicing platforms after an acquisition was a cutting edge story in mortgage technology. And it still is! We had a top bank exec at one of our shows not too long ago who talked about all the legacy systems he inherited, more than 30 if memory serves. His succinct summing up of the situation: it was a hairball.
Fifteen years ago, the electronic mortgage was in its infancy and there was a lot of energy going into figuring out the best way to get rid of paper. That, too, is still with us! Anyone who refinanced their mortgage in the last year or two can tell you the stacks of paper on the closing table are still huge. The e-mortgage isnít as far along as we might have thought it would be 15 years ago. But thatís because it turned out to be a more complicated problem then we knew then. And much progress has been made.
Another topic of lively discussion back then was the best way to deliver technology. Did it come in a box, or did you access it online? Mortgage technologists were thinking about the cloud many years before it had a name, and making it work. Itís fair to say that with all the applications this industry has done that itís not wrong to talk about a mortgage cloud as a subset of the whole.
I also posed this question to attendees: what has been the best mortgage technology over the last 20 years? Call me old-fashioned, and Iím open to opposing views, but Iím voting for the automated underwriting engines developed by the mortgage agencies. This was a real game-changing technology that brought speed and accuracy to loan origination and set the sky as the limit for mortgage penetration.
Of course, in this fast-moving world, you canít just be looking back. What will be up for mortgage tech going forward? Cloud apps, to be sure. The electronic mortgage, for sure. I just did an interview with Tim Anderson where he pointed to the brand-new rule by the Consumer Financial Protection Bureau mandating an electronic audit trail, something that should push the business in the direction of more mortgage automation.
But the real job going forward, at least for the next few years, will be compliance solutions for harried lenders. I suppose it could be called ironic that in this cyclical business the newcomers forget or donít learn the lessons their forefathers so painfully did, and so thereís a crash every 20 years or so. So we saw the savings and loan crash of 1989 and the mortgage bubble that crashed in 2008. That means the next one should be along about the year 2028 or so.
Perhaps mobile devices will be old technology by then.