The digitalization of mortgage lending is not a gimmick to attract millennials but a fundamental shift in the way mortgage lending is done. If you don’t have plans in the works for a fully automated mortgage production process, you should. And if you already do have such plans in the works, you should speed up your timetable for deployment. That is my takeaway from this fascinating bit of researchreleased in February by the Federal Reserve Bank of New York. It’s actually worth reading on your own.
The researchers examined the impact of FinTech lenders. For purposes of their research they defined these companies as lenders employing a beginning-to-end online mortgage application platform with centralized mortgage underwriting and processing augmented by automation. In other words, while aspects of the mortgage origination process have been automated for more than two decades now, what they were interested in examining was the efficacy of Rocket Mortgages of the world. The research looked at some of the most fundamental questions involving FinTech mortgage Lending and concluded that beginning-to-end automation of the mortgage process has so far proven to be not only faster but beneficial to consumers across socioeconomic groups.
The efficiencies speak for themselves. According to the researchers, FinTech lenders process loans 7.9 days faster than non-FinTech lenders. This is true even when FinTech’s are compared to non-deposit taking mortgage lenders suggesting that these results aren’t simply a reflection of fewer regulations.continue reading »