2018 left us no shortage of digital mortgage news headlines and rising trends. Some headlines surprised us because they were so impressive, while others were surprisingly unimpressive (BofA and Wells Fargo, we’re looking at you).
At this year’s Digital Mortgage Conference, we were excited to hear the buzz of mortgage tech innovation was not only coming from the mortgage tech companies, but also from the lenders themselves.
They revealed how combining mortgage tech with a dynamic consumer experience has been essential to their exponential growth in 2018 –even in this higher-rate market.
And then there are the predictions. What it’s store for digital mortgage in 2019?
Read on to review this past year and prepare for next year of unprecedented digital mortgage growth!
American Equity Mortgage Is Out
Mid-size lender American Equity Mortgage, with operations in 13 states, threw in the towel after creditors moved in to collect on over 1 million in assets. A midsize lender closing its doors may not seem like headlining news, but it is once you find out why.
Owner Deanna Daughhetee is credited with the success and rapid expansion of the business post-divorce where she took complete ownership of the mortgage company.
By all accounts, the business was financially conservative. So how then did it go under?
Appointed bankruptcy lawyer Mike Becker explained, “The industry has changed dramatically, and she didn’t invest enough in technology. By the time she did, the hole was too deep.”
Trump Administration Urges Adaption to Mortgage Tech
In a report released by the Department of Treasury and in light of the changes in the mortgage environment, the Trump administration recommended that Ginnie Mae start accepting electronic promissory notes.
Adaption to a digital mortgage is so critical that Trump’s 2019 budget proposal includes funds specifically aimed at improving the digitization of FHA loan docs.
Bank Of America Launches Digital Mortgage (Sort Of)
BofA finally decided to join the digital mortgage party earlier this year. There was quite the buzz over the launch of their new “digital mortgage platform,” which turned out to be little more than a digital 1003 (something that LenderHomePage has been offering and perfecting for several years now).
Wells Fargo also made the news. Not for the launching of their digital mortgage application but for accidentally foreclosing on hundreds of homes –again. Though their official stance is that a computer “glitch” is to blame, Wells Fargo seems to suffer computer glitches a lot more than other lenders.
Perhaps it’s time to look at another digital mortgage platform?
Small to Midsize Brokerages Embrace The Future and Lead the Pack
2018’s Digital Mortgage Conference proved more than a platform for mortgage tech companies to showcase their products. Lenders of all sizes set aside free-market competitiveness to offer their colleagues some words of advice.
“ …there’s always going to be a human element, a human experience needed [however] implementing technology is going to become increasingly important,” stated Atlantic Home Loans CEO Ed Buchser during an interview with National Mortgage News.
So how can an origination-based mortgage company like Atlantic Home Loans stay relevant in this changing landscape? Buchser gave this advice, “…understanding what consumers want…keeping 5-star customer satisfaction…keep up with headline names like Quicken,” and doing all of this through implement mortgage technology.
San Antonio-based USAA takes digital mortgage a step further and uses it to reach their members around the globe. Mostly serving military personnel, USAA implemented a digital mortgage experience that can be used by members even while deployed in other countries.
Predictions for Digital Mortgage 2019
Independent brokers continue to rise to the top.
Consumers prefer the ease of digital automation but still desire the personalized, white glove service. Mortgage brokers who’ve implemented a digital mortgage strategy are in an ideal position to deliver on those both of these consumer demands.
Online tools even more critical to home search and buying process.
For nearly half of Americans, the first step to searching for a home is no longer calling a realtor but instead searching for a home online. Digital collaboration with realtors who are making adjustments to consumer trends is essential to staying relevant in 2019.
A refinance renaissance.
Rising rates may have slowed down traditional home loans, but refis are on their way up thanks increasing home equity. HELOCs, in particular, are predicted to be the primary product.
Origination to closing will be done faster and cheaper.
With the majority of loans still taking about a month to close (which is still faster than previous years) and at the cost of about $9k per loan, we expect both of these numbers to go down significantly in 2019 as the industry adapts to mortgage tech.