The mortgage industry is slow to adapt. We’ve been relying on the same outdated processes and systems for years.
These systems may work to some extent, but there’s no reason why we can’t do better. And in all honesty, we have to do better.
Technology has improved exponentially over the last 30 years. We’ve seen the rise of the Internet, the digital age, quantum computing, and machine learning. But still, the mortgage industry continues to resist the implementation of these game-changing technologies.
Why? Because as we have seen in countless other industries; automotive (GM), video rental (Blockbuster) & travel agency, as technology gets widely adopted, it comes at a (human) cost both positive & negative, with a more seamless experience that negates the need for a person to be involved as much as has previously been required.
Problem #1: Mortgage Brokers no longer fulfil their original purpose
Mortgage brokers were originally created to fill the gap for clients that weren’t able to qualify for “standard bank mortgages”. In a perfect world—this meant scouring the market to pair a lender with a borrower. And for all that hard work, they were rewarded with a commission.
But that isn’t what happens today. Mortgage brokers are now (more or less) glorified aggregators of multiple lenders matching clients profiles to lender criteria - an activity perfectly suited to even the most basic of computer programs and while the mortgage agent might argue that they also impart information & understanding to the client, again, there are easily accessed technologies that will achieve the same results with greater efficiency (FAQ’s anyone).
Contracts form the foundation for most processes in our society. Many things that we rely on would end if individuals weren’t able to deliver on their promises.
The existing model is neither practical or even that customer-friendly.
Mortgage brokers are starting to wake up to the fact that technology will potentially eliminate the need for them or at best, drastically alter the current sandbox they play in. Why? Because AI can find better rates, better terms & better client conditions faster than any mortgage broker can. So if mortgage brokers aren’t even finding the best options anymore—are they really necessary?
Yes and no.
Mortgage brokers will need to adapt. They can still exist if they leverage the technological advancements that AI has to offer. Their focus needs to be on the customer experience and creating a more transparent process for linking borrowers and lenders.
Problem #2: The Current Underwriting System Is Too Slow
Underwriting has always been a tedious task, with many parties involved. The borrower, lender, and underwriters all have to communicate in order to make a loan happen.
For mortgages, the underwriter’s job is to assess the borrower’s credit and then approve or decline the file. Underwriters assess many factors, such as capital, credit score, collateral, capacity, and character.
Underwriters must collect a series of documents from a borrower that demonstrate they are a suitable candidate for a mortgage. Personal information, employment information, credit scores, references, and similar documentation are required.
Attaining these documents takes weeks of back-and-forth from the borrower, bank, and underwriter. The smallest errors can tie up the entire process. Assessing a borrower’s credit is also a time-consuming task. The criteria for being granted a loan is specific to each lender’s requirements.
All of this leads to wasted time, resources, and frustrated clients looking to receive the financing they need to purchase a home or start a business.
None of this is customer-friendly—and we have to do better to solve these issues.
Why AI Is the Change We Need In This Industry
As the world becomes more automated and reliant on technology, financial institutions are still lagging behind. Whether it's because of ever-changing banking regulations or a refusal (or an inability) to adapt, it’s time for change, and AI is the answer.
The financial industry is slowly changing, with major banks investing heavily in AI, blockchain and other innovative fintech.
It’s this belief that serves as one of the core principles of why we started FundMore. We saw the inefficiencies that exist in the mortgage and underwriting processes we’ve relied on for over 100 years.
But we didn’t sit by and watch—we built a solution.
FundMore’s objective is to simplify and streamline the underwriting process by leveraging AI technology. FundMore eliminates time-consuming tasks, document collection, credit assessments, and everything else that delays the mortgage process.
Not only does FundMore automate the tedious process of collecting information, but it uses AI to immediately assess the quality of a given mortgage file. It will assess an applicant’s capital, collateral, character, capacity, and credit and provide you with a lendability score.
Here are several ways FundMore is improving the customer experience throughout the lending process:
- Autonomous scanning and validation.
FundMore uses machine learning to scan and analyze all documents submitted. The AI extracts all relevant data from a scanned document and converts it into information that can be used by the lender. What would take hours of mundane paperwork is done in just seconds.
- Seamless communication between lender and borrower.
All parties can quickly exchange relevant information on FundMore. Lenders can flag mistakes or missing documents, leave comments, and request changes. Borrowers can upload documents and track progress through a client-facing portal.
- Everything is stored in one location.
All information concerning a mortgage file is stored securely on a centralized server. The server is easily accessible to both the lender and the borrower for seamless communication.
- One-click approval.
There’s no need to wait weeks for mortgage approvals. FundMore will allow lenders to assess a file, determine its viability, and release funding in a matter of hours or days—not weeks.
AI technology like FundMore can reduce loan processing times and reduce costly errors from occurring.
The Future of Lending Is Tied to the Customer Experience
Companies that learn to prioritize the customer experience will stand a better chance of surviving in this industry.
Customer’s needs are evolving, and the exhaustively long mortgage process needs to evolve with these changes.
Today’s consumers expect instant access to the products and services they need. The current mortgage system is incompatible with this expectation and will need to adopt cutting edge technologies if it wants to survive.
The regulatory environment that governs mortgages is slowly changing, too, and it’s only a matter of time before these regulations relax, opening the floodgates for innovative companies that have embraced the age of technology.
Mortgage brokers and other established companies in this industry NEED to develop a modernization strategy now before it’s too late.