Would the mortgage industry benefit from an Uber-style technology disruptor? The jury (of lenders) is out.
Sentiment regarding the need for disruption in the mortgage tech space remains divided, though a majority of lenders agree that the industry is working to innovate for better efficiency, according to the results of Fannie Mae's Mortgage Lender Sentiment Survey.
Fannie Mae said Tuesday that 79% of lenders surveyed either strongly or somewhat agreed that the industry is innovating to drive operational efficiency. And 56% of respondents said that they agreed to some extent that the industry would benefit from a disruptor.
But among the 21% who disagreed that the mortgage industry is innovating, nearly 75% of them expressed a need for a disruptor.
And what would that disruptor look like? Fannie Mae noted at least one respondent looked to Quicken's Rocket Mortgage product as "the perfect example." Another lender cited Amazon's borrower experience and automation as an inspiration.
"While some lenders might perceive new industry entrants, including fintech disruptors, as a 'threat,' many acknowledge that the mortgage industry has successfully invested in innovations that reduce the reliance on paper, use data to a greater extent, and provide a more consumer-friendly digital process," Katrina Jones, Fannie Mae vice president of single-family business solutions, said in a commentary to accompany the survey's results.
Overall, in terms of tech investment priorities, lenders identified loan origination and general regulatory compliance more than any other object of investment across the lending cycle.
One thing lenders did seem to have in common was their reliance on what Fannie Mae called "technology solution providers." Fannie Mae reported that 95% of lenders surveyed were dependent on these service providers to some extent, and more than half were significantly dependent.
Lenders said that 84% of their business is enabled by these providers, and the median number of different providers used by lenders was five. A 44% plurality of lenders also noted that they expect their reliance on these companies to grow over the next year.
But dependence on these providers varied based on institution: 68% of larger institutions and mortgage banks said they were significantly dependent on them, versus just 33% of depositories and 43% of smaller institutions.
Fannie Mae surveyed 191 executives from 169 institutions in May to produce the report.
