Being late to the technology party may actually benefit FHA and Ginnie

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The Federal Housing Administration and Ginnie Mae will use their lagging digital mortgage positions to their advantage as they put an emphasis on building their technology.

"We want to get digital. We want to get away from the thousands of case binders full of paper," Gisele Roget, FHA’s deputy assistant secretary for single-family housing, said at the Mortgage Bankers Association National Secondary Market Conference. "We want to have a system that will take a loan through its life cycle."

MBA Chairman Christopher George pointed out that being late to the technology party might actually be beneficial. By coming up from behind, the FHA and Ginnie Mae get to learn from mistakes other organizations made without the experimentation.

Maren Kasper, Ginnie Mae’s acting president, outlined the association’s 2020 plan in three pillars: creating a single sign-on for users, ensuring maximization of data capabilities, and boosting the digital mortgage and e-mortgage initiative. She said to expect a digital mortgage pilot toward the end of the year.

FHA Commissioner Brian Montgomery preceded the panel and noted a dedicated investment to technology. The FHA’s new platform rolling out in 2020 will give lenders a single portal to do business, enabling electronic submission, document management and enhanced processing speed.

"Let’s get to a point where the federal government looks at the FHA as a profit center instead of an area of concern. Clarity and transparency will streamline processes. Make it logical, easy to read, understandable and remove duplicative information," Montgomery said.

Montgomery’s goal is to make it easier for firms to do business with the FHA without compromising standards. The FHA has endorsed a steadily increasing amount of higher risk loans, but it continues monitoring the credit quality of those endorsements. While it requires more comprehensive underwriting, the FHA wants to avoid anything ultimately unsustainable for families.

Enhanced confidence should result in better competition and more options for borrowers. But lenders need accountability for their compliance and clear guidelines laid out in order for that to happen.

"Regulatory certainty is what all our lenders need. They need to understand the rules of the road and what that means for default taxonomy," said Roget.

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Secondary market Digital mortgages Mortgage technology Fintech Underwriting FHA Ginnie Mae HUD Mortgage Bankers Association