ABSTRACT
These article is going to shine some light on the use of mortgage technology in the modern mortgage industry. There are many modern technologies being developed in our current world, software developers have not left behind the mortgage industry behind. Cutting edge technology is available for a fee and also some technology is open-source so it is free of charge. The problem is that many lenders/mortgages are not willing to embrace the new technologies because they are skeptical about losing their money. This is brought about by lack of knowledge about how these technologies operate. Information is vital to sparkle lenders/mortgages to embrace the modern technologies to be able to acquire new clients and retain their clients. The world is moving towards automation of everything so for lenders to stay in business they need to start doing business like the rest of the modern world.
Lenders/mortgages business owners urgently need to be given knowledge on how the modern mortgage technology work, they should not be left behind because they are part and parcel of the current society. The general population needs them to be able to be supported in order to start a business or also in case of an emergency. They make up a very vital part of the society so they also need to be educated to be able to sustain their business and offer services to the general public. Lenders/mortgages need to understand how the system works so as to remove the fear of the unknown which has clouded their way of reasoning and make them skeptical towards this new modern technology. They should also understand that the use of technology can make their business compete locally, nationally and also internationally because our world is a global village according to modern mortgage technology.
INTRODUCTION
Over the past 15 to 20 years mortgage technology has been slowly changing compared to the usage of technology in other sectors. The mortgage industry has been slowly accepting upcoming technology only after other industries have tested and proved that the technology is work well. Some of the mortgage industries who are brave enough to roll out a technology will implement it first on a small branch of the organization. If found to be working well the technology is rolled completely on the whole organization. Getting lenders and mortgage companies to accept the use of modern technology is very hard which is attributed to the many risks involved in this industry.
The lenders/mortgages are skeptical because they are involved in a risky business which can result in loses. So they need to be extra vigilant in what they are involved in before allowing these techniques to be used. Also, it can be attributed to the conservant nature of borrowers who are of old age but it slowly changing because a number of younger people who request loans is going up. And also the older generation has been accepting use of technology both the owners of those lending organization and the borrowers too. It has also changed because youths have been empowered to be a business owner and they understand what their fellow youths need hence they have rolled out the use of tech in their lending or mortgage business making it more attractive.
WHY ROLL OUT MODERN MORGAGE TECHNOLOGY?
There are very many reasons which can push the organization or business owner to start using technology in the places of business. There are advantages which can be directly attributed to the use of technology as they involve both the owner of the business firm and also the customers who relate to the firm using the technology available. Some of the advantages are as follows:-
Client’s experience, customers to the organization want to experience the service provided in the best way they understand. Most of the potential customers love mobile technology because they are used to accessing it. They want to experience service delivery from the lenders/mortgages in the way they are conversant with. So using mobile-friendly technology will make a mortgage or lending firm a hit based on current statistics of mobile phones.
Mortgage and lenders need to comply with regulations. The need to comply with many regulations which vary from region to region and country to country. Lenders and mortgages understand the changing nature of these regulations which happens from time to time. Having the correct modern mortgage technology will allow you to understand and easily configure your gadgets to accept those regulations. The understand the play of their industry that slight failure to comply with those regulations will invite a huge fine.
There is efficiency provided by the use of modern mortgage technology. With the current low rates and other future expected drop in mortgage, the lending and mortgage industry are bracing for a storm. Use of technology will help in cutting costs and making sure the lending and mortgages firms to stay in business. Use of modern mortgage technology will help them realize an increase in profits margin, which is why these mortgage and lending organizations are in business.
Improved communication cycle. The mortgage technology brings to the table faster decision-making process which used to take longer in the past. First decision making will allow the organization to determine if the applicant is eligible for the loan. If they are eligible for the loan or not the technology will allow faster communication to the applicant pertaining their application. Also moving of money to the client has been made easier and also the process of the loan repayment is faster than it used to be. Clients do not want to be exposed to a procedure which requires them to fill a lot of forms to be able to apply for the loans. They just want to click some links and button and loan application is done also they want a shorter procedure which involves checking their mail or SMS for feedback whether the loan application has been accepted or not. Finally, they also need to check their online accounts if it is funded there should not have to go to banks with long lines to be able to bank their cheques.
COMPARISON BETWEEN MORTGAGE/LENDERS WITH OTHER INDUSTRIES IN LEVERAGING NEW TECHNOLOGY.
Mortgage/lenders have been slow in accepting new technology available in the market compared to other industries because of very many reasons which are brought about by lack of correct information about the technology. In this article, I have been illuminating them about many positive aspects which are brought about by the use of modern mortgage technology. Other industries are at the top of sponsoring developers to design them technology which will help them cut cost and be the best in the market compared to the mortgage industry where everything is calm. There are no many trendsetters in the mortgage industry which can spearhead a revolution in how they do their day to day business. The market is ripe for a revolution in the mortgage industry because statistics show that the number of mobile phones available in the world exceeds the number of human beings currently living on planet earth.
Use of technology brings about simple and easy application intake. These modern mortgage technology has enabled its users to have an easy access to forms from mortgage business firms. The forms are available in web portals users can log in and fill it while online or they can download it in form of the pdf file and fill it then scan it and mail to the lending or mortgage firm. These procedure has been used in other industries it is slowly being accepted in mortgage and lenders firms. These allow easier process which used to involve a lot of steps in the past. It has minimized time wastage to both the applicant and the firm, also it has helped in reducing space which used to be crowded while waiting to apply for loans.
The decision-making process has been made to be faster. The use of modern mortgage technology has allowed lending and mortgage firms to be quick in processing the loans because they are able to access the applicant information faster. They are able to vet the client by checking is past loan history based on databases which are available to these firms. The credit score of the applicant will be used which is available in some databases to check if the client satisfies the score required to be loaned the amount they have requested. Also, the work history can be checked and analyzed if the applicant can be able to finance the loan repayment. Applicant does not need to attach their payslips like they used to attach them in the past. These reduce the chance of the applicant providing false information for the safety of the organization.
Using the modern mortgage technology allows processing and closing of the application faster. There are some instances where the system checks if the applicant is eligible and automatically allow the users the loans and sends it to their account or deny them and provide them with a reason why. This system works without any human being interference has been working in other industries and are slowly being introduced to mortgage and lending firms. These type of system will cut costs in mortgage/lending firms which will make the organizations be more profitable.
RECOMMENDATION
I will recommend mortgage and lending business to acquire modern mortgage technology because it brings a lot to the lending and mortgage business. There should embrace modern ways of transacting they finances and also how they check the creditworthiness. They also need to reconsider who they refer to as potential clients. There are a lot of data available they should have their employees analyze how blockchain works. The blockchain is an open source technology which offers open ledger technology which means everybody can see transactions happening theirs. These will help them expand their business they should also get a good website if they do not have one yet. These will give them global visibility, if they choose to integrate blockchain on how they do business it will be a plus for their organization.
Blockchain will give them a platform in vetting their clients from abroad and see how much they have been transacting and evaluating if they are able to finance the loan repayment. This platform will allow them to monitor other potential clients and also ascertain information given to them by the potential clients. Also, it will help them when dispatching the loan amount to their client and also they will be able to receive funds. The fees are also low compared to other online payment processors. Their cash will also increase in value because the price of cryptocurrencies are said to go up because it is the payment revolution which is about to take on the banking scene. But exercise caution and choose the right type of cryptocurrencies don't be a victim of online fraud. Make sure there is a team or individual who is conversant with this technology before giving a go-ahead to the organization to embrace the blockchain technology.
CONCLUSION
In conclusion, the mortgage and lending firms need to embrace modern mortgage technology to be able to compete on an even platform with other industries. They should start launching technologies in some branches of their business before implementing to all their processes. The customers are ripe for this revolution they are waiting for the leader in this industry to spearhead the revolution and they will support them. Other industries are using cutting-edge latest technology these should fuel the revolution of the same to happen in mortgage and lending industries. The potential market is ready for the change because their life is surrounding with technology which is easily accessible than driving or walking to the lending or mortgage firms. The technology also gives the organization the ability to make a follow up of their clients regarding the loan repayment. They do not need higher people to take their messages to their clients there is the direct link connecting them at all times without any additional charges. There is a lot of developed technology which suits the needs of the lending and mortgage firms such as tools which can calculate the interests based on current inflations. These tools are available some are free to use online which can be used by the borrower online before making the application for the loan.
REFERENCES
Kenan R, Partner B & Partner J. (2016). The future of technology in mortgage originations. Retrieved from http://www.oliverwyman.com/content/dam/oliver-wyman/global/en/2016/aug/Oliver-Wyman-The-Future-of-Technology-in-Mortgage-Originations.pdf
Semyon G. (2014). How Technology Has Evolved in the Last Decade. Retrieved from https://learn.filtered.com/blog/how-technology-has-evolved-in-the-last-decade
Donny L. (2018). The Evolution of Technology: Past, Present, and Future. Retrieved from http://www.discovertec.com/blog/the-evolution-of-technology
Andreas F, Matthew P, Philipp S, James V. (2018). The Role of Technology in Mortgage Lending. Retrieved from https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr836.pdf
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