The words “digital” and “innovation” are plastered across the mortgage market from news articles to marketing materials, and yet there are still lenders out there opting to not go digital.
It wasn’t too long ago that Quicken Loans unveiled Rocket Mortgage, its fully online digital mortgage, which jumpstarted digital innovation in the industry. But even though that happened less than two years ago, the pace of technological growth in the industry is exponential.
In fact, mortgage technology is growing so fast that Blend CEO Nima Ghamsari said in an interview, “You could probably with credibility say if you don’t have this technology in three to four years your company will be suffering.”
“The pace of change is incredible. Two years ago, everyone was talking about nothing but compliance. We couldn't even have a discussion with a lender about anything digital,” said Ghamsari.
“Then last year, companies started talking about digital, sparked in part by Rocket and other fintech lenders in the Bay Area,” he continued. “Now, that's the only thing lenders want to talk about. It's been an impressively quick and definitive transformation.”
The point echoes recent comments from Seth Wheeler, managing director, strategy, consumer and community banking with JPMorgan Chase, at the Mortgage Bankers Association’s National Technology in Mortgage Banking Conference.
During a panel about their perspectives on fintech, Wheeler stated, “Anyone not aggressively leaning in on digital will be in a world of hurt.”
Given this call to adapt to the growth in the technology, why would lenders still be reluctant to change?
Ghamsari explained, “The landscape of this hasn’t shaken out yet.”
He noted that Blend is one of the first providers in digital mortgage technology, but there is still a long was to go.
People, instead, might think, “You know, we can wait. We have great clients/customers who will stick with us as we figure out the landscape as it shapes out,” Ghamsari said.
Then, as they see their peers take more of a direction, they could take action, he said.
Ghamsari added that when he started Blend people were surprised they were even building technology that works on mobile, believing that there is no way any one would ever work on their mobile phones.
He also said naysayers believed that there is no way people would log onto their financial accounts on their phone.
Looking at where Blend is today, along with the industry, neither of those assertions turned out to be true.
And why the pace of change is fast, the industry is only at the beginning. Ghamsari said that they know this change is a journey, and it will take a while.
“We should be taking incremental steps along the way,” he said.
“Our first few customers started only with the application in Blend. Then they started delivering disclosures and other regulatory documents in Blend,” said Ghamsari. “Finally they started requesting processing documents and other underwriting conditions via Blend. Their goal has always been to be end-to-end in a single digital platform, but we all need to start somewhere.”