The future of digital mortgages: 'It's a little bit like Burger King'

Full digitization and total automation have been the goals of the mortgage industry for years. Advances in technology inch closer to making it a reality.

As they do, lenders need to stay close to the cutting-edge to achieve a satisfactory customer experience with the increasing amount of digitally savvy borrowers coming to market. The technological streamlining of the loan process makes it more convenient for consumers and cost-effective for originators. Leveraging automated data instead of documents also reduces risk effectively.

Patrick T. Fallon/Bloomberg

The next frontier includes having the entire ecosystem of lenders, servicers, title insurers and appraisers digitally connected so information can be shared instantly and seamlessly. That leap would reinforce compliance as well, eliminating the need for manual checks.

However, lenders also need to maintain a human connection.

"There's clearly more than room for it. I think there's a need for a human touch in this process, in fact consumers are demanding it," Tim Mayopoulos, president of Blend and former CEO of Fannie Mae, said in an interview. "It's a little bit like Burger King. They want to be able to do it their way, and that might be different at different points of the process."

About 70% of consumers said they still want to talk to a person when engaging in a transaction and more than 24% said it doesn't matter if it's human or an AI-powered interaction, as long as the service is good, according to a digital trend report by Speedpay Pulse.

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The technology revolution makes some industry workers worry that they are, in a professional sense, living on borrowed time. Labor is often the biggest cost for originators, and offloading the tedious functions of loan officers' day-to-day tasks that aren't licensable activity onto artificial intelligence can allow mortgage companies to operate more efficiently and increase profit margins. This means loan officer needn't fear extinction in the future, but they will need to evolve and adapt to the times.

"What the loan officer of the future will do is what the consumer really needs and wants: getting that trusted advice as opposed to processing lots of administrative tasks," Mayopoulos said. "I think the future is a world like Apple. You can walk into the Apple Store, you can talk to people at the Genius Bar, they recognize people are still looking for that human connection when they need it and want it."

(Mayopoulos will be speaking at the Digital Mortgage Conference in Las Vegas at 1:20 p.m. on Sept. 23.)

The trend report also showed 44.5% of consumers believe humans in general won't be completely replaced as workers in the next decade because fintech bots can't replicate empathy. While 35.3% said they create a more frustrating experience and 20.3% think they can't solve complex problems.

"The direction we see things going is, you have to provide a frictionless transaction experience," Joe Welu, CEO of Total Expert, said in an interview. "The quality of that experience is impacted by how you advise the customer, how you educate them on which types of loan is best for where they're at in their lifetime, and how do you guide them through that, versus just selling them a loan."

The end-to-end mortgage journey will be augmented by higher levels of automation and technology, but a safety net of human interaction will be needed retain customers.

"If I'm just a number in a massive organization and all they care about is pushing through transactions, I'm not really being valued as an individual," Welu said. "The way I way I feel valued is if somebody understands the lens that I'm looking through based on my stage in life."