Abstract: Automation has transformed mortgage lending, but even greater change lies ahead. E-commerce, Internet origination, POS decisioning, and workflow top list On a scale of one to ten, with one being technologically averse and ten being on bleeding edge, mortgage industry as a whole gets about a five. While that score has been sufficient for many lenders to stay competitive, several phenomena are forcing them to re-think way they do business, and how technology can help them do business better, faster, and cheaper. As refinance boom continues into 1999, volumes of loan activity will remain high. To keep up with consumer demand, mortgage lenders are pressed to do business as quickly and efficiently as possible. And while low interest rates are bringing consumers to mortgage lenders in droves, these consumers increasingly expect top-notch service. They expect near-instantaneous decisions on approvals. They expect information about their loans to he readily available to them, whether over phone or over Internet. They expect their mortgage lender to use technology to make doing business with them less painful and more convenient. This combination of high demand and high expectations will make technology even more important to mortgage lending in 1999. Lenders without appropriate technology in place will be at a distinct disadvantage in future. Another factor affecting mortgage technology for 1999 is continuation of mergers and acquisitions, especially on servicing side of mortgage lending business. And lest we forget, Y2K also presents mortgage lenders with a technology challenge that will affect bow much time effort they can expend on other, less pressing technology initiatives (see Y2K's Impact, p.48). With that as prelude, let's take a look at how technology will affect mortgage lending in 1999. 1. rise of e-commerce It's no surprise that Internet tops our list of technologies that will most affect mortgage lending throughout 1999. Internet is just, well, unavoidable, even for those lenders firmly committed to traditional methods of doing business through their retail or wholesale network. But it is not on consumer side of lending business that Internet will make most impact, at least not in 1999. Instead, lenders will gain their greatest cost reductions and processing efficiencies by using Internet for business-to-business e-commerce transactions. Scott Cooley, president of Contour Software, Campbell, Calif., calls 1999 the first year that Internet will become an indispensable tool for mortgage operation in that it will be key communications tool for e-commerce with all various suppliers. Cameron King, executive vice-president of Electronic Commerce for Countrywide Home Loans, Inc., Calabasas, Calif., agrees. The Internet will empower business partners in real estate transaction with tools or systems and services that are provided by lenders, he predicts. Within mortgage lending, business partners include credit bureaus, appraisers, title companies, mortgage insurance companies, agencies Fannie Mae and Freddie Mac, and others. Internet provides a low cost, easily accessible way to electronically link these business partners together. For example, a lender can send an e-mail request to an appraiser, and appraiser can electronically submit report hack to lender. Economically, Internet is good news. Says James Jones, president of First Wellesley Consulting Group, Wellesley, Mass., The Internet winds up being least-cost commerce option. Brenda Wilson, senior vice-president, Crestar Mortgage, Richmond, Va., agrees that business-to-business transactions are where lenders will get tangible value in 1999. Getting good [consumer] marketing value out of Web is still a few years away for our industry, she says. …
Publication Year: 1999
Publication Date: 1999-03-01
Language: en
Type: article
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