Mortgage Auld Lang Syne

by. Dan Green

As we start the new year there’s no disputing we’ve sung our last Auld Lang Syne for at least eleven months. But there’s something about the song that bears thinking about.

First penned by Scottish poet Robert Burns in 1788, it asks “Should old acquaintance be forgot?” Should we forget the past and the people from our past? Being rhetorical, we don’t have to answer, or do we?

So much of mortgage lending’s future hinges on its history. Sure, most of us would have preferred a clean slate these past few year-ends with the option to simply look forward. But circumstances didn’t allow. However, times have changed and 2014 is different.

Delinquencies and foreclosures are declining. Home prices are slowly rising. The employment picture is improving with all signs pointing to the return to a more normal economy and a steadier and potentially growing purchase money market. Assuming the next twelve months proves this, why look back when we have so much to look forward to? Because some of the answers to future success predate the housing crisis.

Getting borrowers more involved in the mortgage process to the point of enabling them to self-serve on-line dates back to the turn of the century. The first to finance their homes using the internet found it a novelty. Today’s borrowers expect it. A recent survey by Accenture reveals sales of mortgages via the internet increased 75% while sales at branches fell 16%. It’s clear: borrowers meet their mortgages and their lenders in the digital, rather than the physical world.

continue reading »