While most industries grappled with the short end of the stick during the COVID-19 pandemic, the mortgage industry – from mortgage processing to property title search– saw an uptick. Fannie Mae’s research found that in the United States, residential mortgage originations grew more than $2 trillion to $4.5 trillion in 2020. Loan refinancing, on the other hand, hit an all-time high of $2.89 trillion.
This was largely due to the low-interest rates that were below 3% and the extended mortgage foreclosure moratorium. As 2021 rolled in, interest rates were gradually hiked and the moratorium period ended in June 2021 with some exceptions. Naturally, loan volumes and refinancing dwindled, while delinquency rates started to shoot up.
Digitization
Technology was becoming an integral part of the mortgage industry pre-pandemic, but companies have been forced to make the transition quicker in the last two years. A lack of physical interaction necessitated digital solutions, which the industry was quick to adapt to. From catering to socially-distanced borrowers through online loan applications and mortgage processing to managing a digital workforce buoyed by workflow automation and artificial intelligence, the mortgage industry has now caught up with the fintech sector when it comes to digitization.
Going forward, it can safely be said that even as the pandemic eases and things are slowly opening up, the technological revolution of the industry is here to stay. Keeping that in mind, let’s look at some of the key trends that we can expect in this sector in 2022.
Mortgage Industry Trends in 2022
#1. Less Manual, More Automation
Automation in mortgage processing and refinancing services saw an increase during the pandemic. In the coming year, the level of automation is expected to grow, supported by robotic process automation (RPA) and frameworks that are efficient, accurate, and speedy. Loan process automation works on the principle that though the mortgage process can be complex, it is based on certain routine steps that can be robotized.
#2. Artificial Intelligence Will Dominate
The mortgage industry is traditionally paper-intensive, with loan documents often running hundreds of pages. Machine learning and artificial intelligence can streamline the process, from application and processing to claims management. For instance, AI can assist officers in processing large chunks of data and pulling out information from a knowledge database. This will improve customer experience and leave officers with more time to interact with homebuyers.
#3. Increased Importance of Mobility
A major shift in the mortgage industry will be towards a mobile-first attitude. This means providing consumers with seamless digital and omnichannel experiences with apps that provide multiple levels of functionality. Mortgage lenders who provide loan calculation tools, analytics, tracking, and other processes in a single app will be able to engage customers better. As customers get increasingly tech-dependent, providing easy digital processes can also improve loan payments and cut delinquency rates.
#4. Blockchain Integration
Another interesting pivot in the mortgage industry will be the crucial role that blockchain will play in facilitating transparent, frictionless and error-free mortgage processes. A blockchain-based system can reduce operational costs, fees and fraud for mortgage lenders.
Outsourcing Mortgage Processes
From RPA to digitizing mortgage loan origination services, designing an in-house solution can be confusing, time-consuming, resource-intensive and challenging in terms of maintenance. To get the best-in-industry output on employing the latest technology in mortgage processes, partnering with a trusted third party can prove to be an effective way of staying ahead of the competition.
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