Last night, I went to celebrate the completion of the first ever fully digital mortgage with Notarize and a host of happy industry pros at the Digital Mortgage Trailblazers event in Dallas' beautiful Arlington Hall.
As we milled about talking business, mulling on the future and sipping sundry beverages, there was an tangible air of optimism in the room. In what can often be a stodgy and slow-to-change industry, in this room, in this moment, it was not. I could feel the advent of the digital mortgage breathing actual excitement into everyone in the room — from the software developer walking me through his product to the smiling real estate and title agents ready for change.
It was here, mixed in with an enthused crowd, I learned a few little somethings about the future of the real estate industry.
1. The digital mortgage is the future, and the future is now, but there are many battles that must be fought at the county level allow the digital mortgage to become the only mortgage.
Notarize Founder and CEO Pat Kinsel told me that there over 30 states with bills ready to bring to the floor next legislative session, and thanks to Texas, there is a great chance that those states will pass bills legalizing remote (video) notarization. The problem is passing those bills is only the opening volley of a fight for the digital mortgage. Once passed, it will take a lot of time, effort and teamwork to address concerns and get approval at the county level. Kinsel made a great point when he said no governor wants to be the person that tells notaries they are out of a job. This is the natural downside to technological advancement. There will be people who get left behind or pushed aside. It's something we must all deal with as the digital age continues to work its man-made magic on our industry.
2. Once we accept the digital mortgage, the game is going to change big time.
Did you know that real estate transactions account for 45% of the 1.25 billion notarizations in the U.S.? That translates to about 2.2 billion documents, 260,000 trees and a whole lot of inefficiency. The average cost to produce a mortgage is over $9,000 and for the first time in 14 years, lenders lost money on the average loan. The cost of labor to produce one mortgage is about $2,300 dollars which is just under what it costs to manufacture a car. The digital mortgage will cut down on all this excess and inefficiency, hopefully freeing up time to close more mortgages and sell more homes…We’ll see what home prices and Millennials have to say about that.
3. People, not just industry people, want this.
There are some people saying that consumers don’t want a fully digital mortgage, but research shows that 80% of consumers will pay for a better, more convenient experience. The digital mortgage is nothing if not a massive timesaver. There would be no need to take off work to sign documents. A consumer could do it in a lunch break. Other people say that the digital mortgage is only for the digital natives, but that is just not true. The average age of a Notarize customer is 51…so, not a digital native. People want better, faster, easier service in every aspect of their lives. That is the digital mantra, and we are in the digital age. Matt Ishbia, president and CEO of United Wholesale Mortgage and launch partner for Notarize, said: “time matters to everyone; speed matters to everyone; and ease of use is for everyone.”