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Robots could replace loan officers in the future

Digital Mortgage conference showcased innovations coming to the mortgage industry.

By Jeff Lazerson


What I think: A mortgage robot may be in your future.

Since my day job is writing mortgages, that was my most unnerving takeaway from the Digital Mortgage conference held in Las Vegas this past week.

Lenders are choking on the largely human expenses to fund and book new mortgages.

Loan officer compensation and their resistance to technological change are big challenges to lenders’ efforts to drive down the cost of issuing mortgages, said Garth Graham, technology consultant at the Stratmor Group. He said it costs lenders $7,559 for acquiring the typical retail loan.

Twenty percent of lenders are using BOTS (robotic process automation) for various loan production processes, and 50% are already seeing a positive ROI (return on investment), according to Stratmor research.

BOTS are “human beings replaced by machines at its essence,” said Graham.

Blockchain is another very hot topic. Some see it as a safer way to transfer funds for a home purchase, for example. Blockchain could reduce bank wires from being fraudulently misappropriated compared with current electronic bank wire transfer processers.

Very simply stated, blockchain is automation that brings traditionally paper-based processes to paperless processes with an electronic audit trail.

There is application for mortgage origination, loan fulfillment, purchase or refinance settlement, loan servicing and secondary market transactions. In the future, you may be able to “tokenize” a piece of your property and sell it on the secondary mortgage market, according to Bennett Moore, management consultant at RSMUS. Traditional servicing lenders might not be needed.

Can you say lender disintermediation?

During another session, Tim Mayopoulos, former Fannie Mae CEO and current president of technology company Blend, told of the water cooler conversation at Fannie Mae the morning after the 2016 Super Bowl.

Quicken’s Super Bowl commercial had introduced Rocket Mortgage: “Push Button, Get Mortgage.” (Full disclosure: My firm Mortgage Grader is a Quicken customer).

“You really couldn’t push button, get mortgage,” said Mayopoulos.

Mayopoulos went on to promote Blend’s Instant One-Tap Pre-Approval that home shoppers can do right at an open house, for example. Blend’s press release stated in part that its One-Tap technology enables lenders to verify a consumer’s assets, income, employment and liabilities.

Mayopoulos told me the One-Tap pre-approval is limited to Fannie Mae for W-2 wage earners (not, Freddie, FHA, VA, jumbo or self-employed).

Another thing I learned at the conference was appraisals may become faster and safer.

Exos offers technology that can very quickly calendar an appraisal inspection via text, identifying the appraiser via photo and car description. The technology can track the appraiser checking in, inspecting and checking out.

Mortgage broker Jeff Lazerson can be reached at 949-334-2424 or jlazerson@mortgagegrader.com. His website is www.mortgagegrader.com.

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Jeff Lazerson - Mortgage Columnist since 2011