Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
A mobile future for mortgages
November 30, 2010
A cursory glance at any history book more than a decade old (back when we used to compile historical information into books instead of wikis that can be easily updated as we go along) will reveal that great leaders always seem to emerge during highly volatile times. Few are the truly great who inherited a peaceful land in a time of plenty — and still made it into the history books. There may have been some, but they are pretty much all covered together in a sentence that usually goes something like, "and then there was a 1,000 years of peace and prosperity." Sucks to be those guys. I believe that truly great leaders live during uncertain times. That's when they are needed. And that's generally when they appear. That tells me that there are some great leaders working in the mortgage industry right now. I mean, can we agree that the whole system isn't going to collapse when secondary market investors realize that systemic chain of title problems have effectively turned all mortgage-backed securities into nothing-backed securities (and liquidity dries up like it was hit by a giant ShamWow)? If we can convince ourselves that we're not fast approaching the 2012 the Mayans promised, then there must be some great leaders poised to spring into action. I have my eyes on a few folks who will probably end up filling heroic roles over the next year or two. That list is currently under lock and key, because I don't have a sufficiently high level of confidence to release it yet. One thing I am sure about, however, is that the great leaders of the mortgage future will be mobile. Mark Dangelo, an industry consultant and author (Mark and I worked together on a white paper for a big outsourcing outfit a few years back, but we're otherwise unconnected, except for my respect for him and his work), has been thinking a lot about mobility of late. You can get information about his most recent White Paper on his website. It's a good read. He recently wrote: "The headlines tell an unfolding story of innovation immaturity when it comes to mobile data and its handling, retention, and protection. In a rush to occupy the channel and lock?in consumers, organizations are ignoring the custody and non?repudiation mandates that are implicit within mobility solutions. Just as with proven legacy systems, consumers and regulators demand mobile integrity that transcends transactions and devices." I think Mark is one of the smartest guys in the business and I think he's correctly identified a problem that will keep all but the future leaders of our business from fully capitalizing on the promise of mobile mortgage origination. Taking the loan origination system off the desktop and putting it on a laptop that could connect to the internet anywhere was a great first step. It allowed loan officers to take applications and start processing loans anywhere they could find a Wi-Fi hotspot. But the future, I'm starting to see now, will take mobility much farther than this. Do you want to know the secret? It's not about the software. Instead of being able to originate a loan anywhere there is an internet connection to put an LO in touch with an LOS, future originators will be empowered to begin working on a new loan anytime the network (real world or web-based) puts them in touch with a prospective borrower. That's the future of mobile lending. We have to break out of the software box and remember that truly great loan originators are not software operators, they are smooth operators that work best when they come in contact with buyers. In other words, salespeople. Somewhere out there, right now, there are a few industry leaders that are trying to figure out how to empower a team of high performance loan originators to infiltrate social networks and begin the origination process almost before the prospective borrowers realize they are in the pipeline. It will require a web-based LOS with social network-ready connections and a transparent porthole into the secondary market so interested investors can bid on the deal before it gets to the closing table. Plenty of fraud detection and compliance checking all along the way, but all performed behind the scenes, regardless of where the LO or his borrower happens to be (in space/time or process workflow). The future mortgage originator will operate very much like a financial services James Bond, capturing borrower data swiftly and securely and dispensing loan status information back effortlessly, sipping martinis with the borrower while technologists back at headquarters move the deal smoothly through to the closing table. Loan quality will be obvious at every step of the process and deals will flow freely into a fluid secondary market where investors can be anywhere. Oh yeah, it's going to be a very mobile mortgage future, assuming we have a future and the government doesn't step in to take it all off our hands. Rick Grant is veteran journalist covering mortgage technology and the financial industry. Follow him on Twitter: @NYRickGrant