Like every other aspect of banking, mortgage lending continues to change as technology streamlines processes and gives would-be borrowers access to more lender options.
“The mortgage industry over time has evolved to be more automated,” said Chris Turner, a mortgage originator in Wrightsville Beach for Northpointe Bank. “I have been licensed in several states for a while, but I can now lend in all 50 states.”
Northpointe Bank has a single branch, in Michigan.
“Having that one, federally regulated branch allows us to run mortgage operations in all 50 states,” Turner said. “It was founded for that purpose in 1999.”
What has truly broadened the geographical lending scope of Turner and his Northpointe colleagues is the streamlining of appraisal work. Thanks to technology, a mortgage originator no longer must root around for an appraiser in the area where the property is located. The appraisal industry has become nimbler, and now, thanks to working relationships with five or six appraisal management companies (AMCs), he can get a value assessment of a home anywhere in the U.S.
When he is contacted with a mortgage request – and most of his business is through repeats and referrals, he says – Turner sends the applicant an email with a link to the application form and a list of documentation needed.
“Once the purchase contract comes in and we’re in process, that’s when I choose an AMC and hire them to do the appraisal,” he said. “The AMCs have teams of appraisers.”
Loan qualification is also primarily automated, according to Turner.
“The applicant needs to be as accurate as possible in reporting income and the amount of their down payment,” he said. “I pull up their credit report and look at their assets. I put it together and run it through an automated system that generates approval or tells me what is needed for approval. I hand that to my processor, and she collects the information and send[s] everything to the underwriter. The underwriter gives the final yes.”
Northpointe is not alone in using technology to speed up various aspects of the qualification and lending process. Online or email applications and automated processing are a boon to all kinds of mortgage lenders, experts say, even those whose markets are more restricted geographically.
Corning Credit Union makes mortgage loans in the states where it has a physical presence and where it has large concentrations of members: New York, Pennsylvania, Maryland, North Carolina, South Carolina and Florida. Online tools are essential, but communication is moving to other online channels as well. Social media outlets play a larger role in spreading the word about mortgage products, said Bill Scott, a mortgage originator with Corning Credit Union in Wilmington.
The gig economy and related changes in personal income streams are also on the horizon, Scott said. And that will complicate income reporting when qualifying for a loan.
“When it comes to Gen Y and younger, income will be different,” he predicted. “They will not be just strictly a W2 employee. It may be a combination of a regular job and, say, blogging or another online business.
“I think every lender has got to adjust, and they will adjust,” Scott added. “But we’re still focused on [the loan applicant] as a member of the credit union. We offer personalized service that will translate through every dealing. Part of that personal service is recognizing technological changes. Those tools will be available, but it all comes back to personal service: calling somebody by name and being there for them.”
Turner says the personal element is what distinguishes the mortgage experience he and others at Northpointe offer from that offered exclusively online through lending portals.
“Most borrowers have quite a few questions and want one person they can talk to,” Turner said. “I am their point of contact until they close. With us, it’s a direct referral, and we’re the point of contact from start to finish. We also keep the bulk of our loans rather than selling them to the secondary market. Most of my customers call me back later [with questions]. Most of the time, the loans are still with us, and I can answer their questions. That personal element is the lifeline of my business.”
Scott sounded a similar note. While technology is making the mortgage process smoother, people still want some element of personal contact.
“Online mortgages are taking a bite: That is competition that has to be dealt with,” he said. “A lot of that is because the younger generation is geared to doing things on their phone. Older folks are geared to in-person and telephone conversations. I believe that most folks, especially after the pandemic, are starting to realize how much they missed that personal connection.
That’s the competitive advantage that we and other folks like us have over internet banking.”