Super Bowl ads are queued up and ready to wow us next week and I am ready to see how the new Rocket Mortgage is going to change life as we know it. Many of us have also seen the commercial with Ty the home renovation rock star touting the “first ever digital mortgage,” and there is certainly no shortage of iMortgage lenders carving out market share in the already pretty crowded mortgage lending landscape.
There is no arguing that technology is on the march in the mortgage industry and the dawn of the “no touch” mortgage is upon us, but it is premature to mark the end of traditional “high touch” mortgage getting. In fact, no touch and high touch mortgage getting and every variation along the continuum between the two, will necessarily co-exist for at least the foreseeable future.
Technology has enhanced virtually every aspect of our lives, and in many cases it has completely changed, upgraded, eliminated or revolutionized the way we do things. We text, tweet and post instead of having actual conversations. We add-to-cart, pay for stuff virtually and wait for delivery instead of actual shopping in an actual store and even when we do that, we waive our smartphones in the air and magically pay for whatever our consumptive hearts’ desire.
We shop for and actually buy cars and appliances, furniture, clothes, travel and everything else on our smartphones, tablets and good old fashioned laptops!
And as far back as 2012, NAR research showed that 90% of home buyers searched online during their home buying process. And of course, every lender on the planet has “Apply Online Now” technology hard wired into your sightline on their websites.
Virtual finance is already here, right now. Car loans, student loans, credit cards, even secondary mortgage financing (Home Equity Lines Of Credit) are most easily and conveniently gotten using keystrokes and algorithms. So the natural order of things is for traditional mortgage lending to evolve to the same technological heights of credit granting.
The fact is that technology has already revolutionized the mortgage lending industry; loans are approved using automated underwriting engines like Fannie Mae’s DU (Desktop Underwriter) and Freddie Mac’s LP (Loan Prospector). And there are all manner of virtual tools and enhancements for managing documents and moving loan files along the assembly line to homeownership.
Lightning fast, technology driven mortgage loan getting is no doubt a reality at Rocket Mortgage. But the reality is that not every homeowner candidate is going to fit inside the tech driven decision box that will bring a successful outcome. That is because tech driven decision boxes are not 100% accommodative. Outside the box homebuyer circumstances will quickly force a no touch start into a high touch finish. Income sources, assets-to-close, credit issues, occupancy and a myriad of not-so-shiny hiccups will trigger eyes on review by an actual human being. While the process may start with a smartphone and a flurry of keystrokes, an unforeseen error message may direct the virtual mortgage getter to take a detour and speak with a “mortgage representative.” This is known as high touching.
So just as there is a virtual everything segment of the population that will only pursue mortgage getting using no touch tools, there is a like size population sample that will still use traditional high touch mortgage getting because they have to or want to.
Technology driven mortgage getting, evolved from the generation that knows only ever advancing technology as a means to do everything. For them, there is no alternative to using a smartphone or a tablet to get a mortgage to buy or refinance a property. Just as you can’t expect them to wear the same clothes and listen to the same music as their parents do, this is the no touch mortgage getting market segment.
To illustrate; I am writing this from my home office and my high school senior son and some of his knucklehead friends are downstairs right now collaborating on a school project. There is a laptop connected to the big flat screen TV in the living room, another laptop is synching background music, a smartphone is propped up on the coffee table recording video of their discussion and I’m not sure what the tablet is for but it is there in the mix. Chances are, when the time comes, everybody in this group will be no touch mortgage getters using whatever the latest and greatest tech device may be.
I on the other hand was impressed and admittedly dumbfounded at the level of tech coordination they had deployed and I wasn’t really sure how they were able to do what they were doing. So it is probably no surprise that I am of the high touch mortgage getting segment of the population. The fact is that my and other generations are more comfortable interacting with human beings when the subject is as big as decades of mortgage payments, so chances are, we will remain to some extent at least, high touch mortgage getters.
There is one other thing; mortgage financing has all kinds of FinReg obstacles to navigate and as advanced as the technology may be, there are lots of navigational buoys still unchartered. For now at least, the financial penalties for missing the QM (Qualified Mortgage) bulls eye, will keep mortgage lenders from delivering true and pure no touch mortgage getting.
So bring on those Super Bowl ads and for the record, even though my heart says Peyton, my head says Carolina.
