DS News recently spoke with Josh Friend, CEO of InSellerate, to dive deeper into the topic of mortgage technology systems and why they are increasing in popularity for lenders and servicers.
What trends are you currently seeing in your sector of the mortgage industry?
One of the largest trends we are seeing right now is how mortgage companies are really starting to increase their spending on technology. In the last three years, the large banks have doubled their technology cost per loan, according to a study done by the STRATMOR Group. This has really shown that as the digital mortgages are coming out, people are expecting better service and more efficiency.
On the product side, we are seeing a lot more companies trying to get into the purchase and consumer direct world. Most of the large lenders' initiatives are now consumer direct purchase and that is because the growth in that segment has doubled in volume over the last four years.
What are the challenges that come with developing and implementing technology platforms?
One of the big challenges is financial technology because for a lot of people it is very new and in the infancy of the industry. Most sophisticated systems are all home grown proprietary systems that companies who really got technology and had a team to do it were able to employ. So, I think one of the challenges is that a lot of lenders may not necessarily have the bandwidth and expertise to manage technology themselves or to understand what the best solution is. Lenders need to understand what their business needs are and what the product set is that they are getting from their potential vendor.
Are their opportunities that come with using technology systems?
That is one of the most exciting parts right now because these systems and technology that are used to manage these lenders' leads, give an online loan application, and pricing are now pieces of technology that any lender can go buy and deploy. One of the big advantages in software is the service. For example, our platform was originally built for a lender as a proprietary system was then built into a product to sell to multiple lenders by taking all the learning that these companies have done building their own platforms. Now you are starting to see some of the technology come and be made available to lenders of all sizes. Whether you are a lender with 10 loan officers or 500 you can use the same technology that is relatively inexpensive and serviced. These lenders no longer have to have an IT staff to maintain it or run it or build servers but everything sits up in the cloud. Technology is more accessible now than it's ever been.
What will mortgage technology platforms look like moving toward 2017?
Technology is increasing exponentially. Over the past three years the amount spent on technology by big banks has doubled so all the other lenders are now trying to catch up. The race is on, if you will, for lenders to understand how to become more efficient. The ones that do become more efficient will be the ones that survive, thrive, and grow market share.