4 Ways Technology Will Disrupt the Mortgage Industry in 2021 and Beyond

security best practices for mortgage lenders

In today’s online marketplace, specialized technology holds the key to consumer attraction and increased efficiency, both of which have the power to make or break a company’s bottom line. So what sort of new mortgage technology keys are waiting to be grasped in 2021? How will your company use them to unlock future potential in the market?

1. Accelerated tech needs

The pandemic of 2020 pushed the mortgage industry into a new era of technology born simply from necessity. Day 1 Certainty and integrated user interface systems had been simmering in the background for a while, but work-from-home mandates brought these capabilities to the forefront for many mortgage professionals.

Where some companies were reluctant to invest in tech advancements prior to the COVID outbreak, most lenders now recognize the need to offer online mortgage solutions. In short, these offerings are becoming table stakes necessary to appeal to the socially-distanced borrower and to empower their socially-distanced workforce. Loan originations reached an all-time high in 2020, with double the dollar-value of refinanced loans over 2019, all in an environment where people could not meet face-to-face. This reality formed the backdrop for accelerated technology needs.

To respond to unprecedented demand in an unusual environment, mortgage companies relied heavily on technology designed to reduce anxiety for the borrower while also increasing support for the lender, while still managing the very real risks of a market shift. The tech industry was poised to respond, with systems such as document processing, data verification, and remote notarization designed to increase effectiveness in the midst of unstable times.

Launching off of the technological revolution of 2020, mortgage professionals should anticipate tech advances on both the point of sale (POS) end and the back-office support end. Keeping a healthy bottom line in the years to come will depend on evolving technology that meets needs at each stage of loan origination process.

2. Enhanced digital borrower experiences

Since the country shut down in March of 2020, Americans have become accustomed to doing almost everything online or from an app. The digital offerings that used to be optional are now essential in almost every sector—and that includes the mortgage industry.

Let’s face it––when borrowers come to lenders, they’re nervous. They’re nervous about making a big purchase, they’re nervous about sharing their information, they’re nervous about deadlines, and they’re nervous about decoding their options. Basically, they fear making a decision that could cost them more money than it should.

Technology can help ease those nerves, especially for the millennial or Gen Z borrower who is accustomed to consuming information and connecting with others in an online space. According to the National Association of Realtors, millennials made up the largest portion of homebuyers in 2019 with 37% of home sales, so it’s essential for mortgage companies to cater to these buyers.

When a younger borrower comes to the lending table, they’re definitely not expecting a physical table. They want digital options that feel comfortable to them. Often, that looks like a one-stop mortgage interface with features such as:

  • Pre-fill loan application forms
  • Seamless content (branded, clickless)
  • Online chat options
  • Easy document imports (direct from institutions)
  • Mobile readiness
  • Reduced complexity (intuitive forms with clear instructives)  
  • Integrated reminders and loan processing updates

Data shows that millennials (and other borrowers) continue to want human interaction throughout the mortgage process to support them and answer questions that may arise. Still, an expectation for convenient, digitally-led features will only become more vital as younger generations step into the homebuying space.

3. Streamlined back-office support

POS tech can only take lenders so far. Technology designed to support the implementation of the loan has to grab the baton and cross the finish line, so to speak. Up until recently, lenders have hesitated to invest in backend technology, focusing instead on customer experience software, where arguably little to no return on investment can be practically measured.

Streamlining the back office with proper technology is imperative when it comes to realizing a return. A lack of efficiency in back-office operations not only affects loan processing speeds and loan officer morale, it also has an impact on the saleability of loan products overall. Eventually the consumer won’t care about savvy front-end tech if a backlog in underwriting causes them to delay closing or miss deadlines. They’ll take their business elsewhere, and all the money spent on borrower experience tech will be for naught.

In the coming months and years, lenders should keep an eye on the constantly evolving mortgage tech industry, especially in the following areas. 

Data collection

For years, big data has helped to increase efficiency in the healthcare and pharmaceutical industries. The tech is there; the mortgage industry just needs to figure out how to use it in the most ethical and economical manner. In the future, big data could centralize information for lenders and allow for faster, more reliable analysis. A one-stop data shop could take the guesswork out of decision-making, account for broader credit-worthiness criteria, and potentially remove personal biases from the loan writing process.

Collateral valuation

During the pandemic, distance appraisals became commonplace as data-driven valuations replaced the need for “eyes-on” personal valuations. The same appraisal that took seven to 10 days was available in a one-day turnaround, much to the pleasure of both lenders and borrowers. Future advancements in valuation data streams could speed up the process even more, assuming a focused effort is made by mortgage tech leaders. Imagining accurate appraisals available in minutes isn’t so farfetched. 

Underwriting support

Inefficiencies in underwriting should be the top priority for large and small lenders. Numerous studies indicate that the average mortgage underwriter can process two to two and a half loans each day. Underwriting support technology––including document procurement, digital notarizations, data connectivity, and more––could realistically see a quadrupling of that output. Since underwriters are one of the most highly paid individuals involved in the loan process, efforts to increase their productivity should not be taken lightly.

Loan officer communication

Prior to Spring 2020, a relatively small percentage of the workforce took part in video conferencing on a regular basis, but today, Zoom, Skype, Teams, and Google Hangouts are household words across almost every demographic. The mortgage industry can capitalize on these now-common experiences by offering the personalized service that some borrowers want in an online format that almost all consumers have come to embrace. Incorporating a platform that’s designed to interface with potential borrowers in an online capacity not only saves time for the loan officers, but it also could save money by reducing physical office space needs.  

4. Increased security provisions

Now more than ever, borrowers want to be certain that their personal financial data is secure. Already, identity theft companies have pinpointed and capitalized on the threat of title hacking, claiming that electronic documents increase the risk of cyber crime in the form of equity theft. As technology continues to streamline the mortgage industry landscape, lenders will need to align with partners who are poised to answer security-related issues and adapt to new security needs. In the near future, developments in the arenas of verification software and robust data protection will be important to watch from both a borrower and lender perspective.

Maxwell’s Implementation

When it comes to streamlining the mortgage process, we believe in offering simple, modern tools that empower lenders to offer their borrowers a delightfully intuitive experience. We’ve been working hard to innovate powerful solutions on both the POS and lender support fronts, including white-label branding, our proprietary QuickApply™ pre-fill loan application, and a fully-customizable 1003 that reduces complexity and increases completion rates. All of these features and more result in a mobile-first, convenient process for borrowers and loans that close 45% faster than the national average.

Want to uplevel your technology? Download our free ebook “Digital Mortgage Buyer’s Guide” to learn how to choose the best digital mortgage solution for your business.