The new normal of mortgage lending

When 2020 forced us to react to a pandemic, none of us knew how our lives would change and what our new normal would look like. The generally accepted expectation of a short stent of inconvenience slowly turned into months of disruption and it became apparent the pandemic would be here a while and it was going to be painful.

Things like in-person meetings jumped to video calls. Trainings, tradeshows and onsite networking opportunities became virtual. The mortgage experience, well, it had a brief burst of process improvement to make changes that were low-hanging fruit and figure out virtual and e-closings. But lenders quickly learned that some of the changes were connected to legacy systems and that type of change did not come quickly.

In the end the mortgage process didn’t change all that much. Thankfully, most of the fulfillment and origination process had already evolved to a digital experience. Borrowers have applied online for years and the online application has become better and better over time. That is not to say that the pandemic has left mortgage lending unscathed though.

For the lender, the impact of the pandemic was in the nuances of fulfillment. Suddenly it became challenging to get an appraiser to wander through the house of someone they didn’t know to assess the property. It became very difficult to reach an employer to verify income. Individuals who used the internet in public places (libraries, cafes, public WiFi) lost the ability to access online portals and submit documents as those public businesses and services shuttered. The most impacted, though, was the financial market and how it approached risk mitigation in this new environment.

 

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