As mortgage technology infiltrates the industry, it poses a new question for lenders on how they want to move forward into the automated world.
Early on at the Mortgage Bankers Association’s National Technology in Mortgage Banking Conference and Expo in Chicago, Seth Wheeler, managing director, strategy, consumer and community banking with JPMorgan Chase, asked the question, “Do we build or do we partner?”
Joseph Tyrrell, executive vice president of corporate strategy with Ellie Mae, who also sat on the panel with Wheeler, dug further into the question in a follow-up interview with HousingWire, explaining how Ellie Mae chooses to answer the question.
Tyrrell stated that for Ellie Mae, figuring out whether the company wants to build, buy or partner comes down to three factors.
1. Is this something that is critical in the use of every transaction?
2. Is it a core competency of ours?
3. Do we have the capacity to meet the needs of the market in time?
If they can fulfill these three areas, Tyrrell said they opt to build.
However, and unfortunately for the bottom line, not everyone in the industry follows this model.
Throughout the conference, people said that it is not uncommon for people to start to build the technology themselves, realize it’s too intense of a process and end up choosing to go with a mortgage vendor for digital technology.
Tyrrell’s comments were similar, stating, “We've seen many go down a path to build themselves and then come back and realize it's not the best use of their resources and capital.”
One reason behind this, Tyrrell noted, is that people think, “If innovation is so critical, maybe we should hike a path ourselves.”
He also added that people don’t like to feel as if they aren’t in control.
But what people miss is that although they have the technology, they might not know how to interpret regulations or how to apply them to technology, he said.
For example, Tyrrell noted that people don’t always account for the unknown consequences of moving quickly to deploy technology.
Ellie Mae plans out its technology three years ahead of time to make sure they have ample time to pivot, Tyrrell said.