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Five things mortgage executives should know about technology before the anticipated rate reduction

The mortgage business is in a downturn due to the high interest rate. However, better days are ahead. The consensus among mortgage experts is that the rate will eventually go down, thus driving mortgage origination volume up due to an anticipated mortgage refinance boom.

Many mortgage executives who are currently on the sidelines are getting ready to re-enter the fray by opening their new mortgage companies. Small mortgage companies that are barely surviving will do their best to hang on, waiting for the business upturn. The same goes for larger mortgage companies with reduced capabilities and volume.

The competition will be fierce for experienced mortgage talent, especially in the technology area as this is usually the most expensive and complicated area to restart or build up from scratch. Mortgage executives will have these questions:

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What do I need to do to get started? How much investment is required?

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How do I get the talent back? Do they want to come back?

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How much has the mortgage technology stack advanced? What is the cost of modernization?

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What are my competitors doing? How do I keep up?

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Artificial intelligence, cybersecurity, blockchain, process automation and outsourcing, etc. – how do I get on top of these issues? Are these competitive advantages or just expensive hypes?

Here are the five things mortgage executives should know and consider about technology:

1

First, the basic block and tackle activities are still very relevant and required. Internet access, desktops, laptops, peripherals, Office365, access to an LOS platform and all the third-party mortgage technology service providers, back-office automation, front-office automation. It takes a typical company a month, sometimes years, to get the technology infrastructure in place. Furthermore, expensive, and never-ending care and feedback to the infrastructure is a required component.

2

The mortgage technology resource pool is expensive and hard to find. Former CIOs, CTOs, directors of technology, architects, administrators, developers, and mortgage technology SMEs have moved on to other more stable and better-compensated verticals. Some will come back out of loyalty, familiarity and “the right package.” Many others will not.

3

The upcoming re-emergence of the mortgage business is a great opportunity for process re-engineering and automation. Manual processes with large investments in human capital can be replaced with automation and process streamlines. Artificial intelligence (A.I.) can play a part. However, A.I. is still in the transition stage and may not be ready to reap the benefits of automation. Think of the automated customer service chat feature using RPA. Customers are annoyed by it. They want to talk to a human to help solve their issues. The RPA BOT also has limited problem-solving capabilities.

4

Cybersecurity is no longer an optional corporate function. Fintech companies are at the forefront of cyberattacks. The loss of customer data and company reputation are enough to put a business in jeopardy. Cybersecurity is also expensive and not well-understood by business leadership. It is usually viewed as a technology function. IT IS NOT! It is a company-wide function that should be actively sponsored, encouraged, and enforced by the executive team.

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Lastly, due to government oversight and compliance regulations, mortgage companies are hesitant to be innovators and try out new solutions. It is safer to be an aggressive follower and allow someone else to take the risks. What if you can never catch up? Some companies are happy to get their “fair share,” others just want to be in it for the long run. Having the right technology will not allow companies to overtake Rocket Mortgage. It will provide a solid foundation for growth and long-term sustainability through innovation and optimization.

Here are several suggestions for mortgage executives who want to re-enter the business or who want to rebuild and grow their business:

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1. Do not invest in technology because you think you need it. Instead, invest in business vision and process. Use technology as an enabler.

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2. Find a technology partner that can help build and align business/technology vision and execution. Hold the partner accountable for both the strategic tasks as well as project execution.

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3. Be open to changes. The way technology was used to set up, collect data and guide a loan through the approval process can be automated and optimized for better and quicker results.

Dragon9 Partners is your technology enabler. We can help you get to lending faster with our Mortgage Technology as a Service (MTaaS) platform.

We are here to work with you throughout the entire loan cycle. We can provide strategic alignment, project execution, cybersecurity implementation, infrastructure setup/maintenance/support and enterprise application development and maintenance. Call us. We are ready to help.

Michael H. Wilson is the President and Managing Partners with Dragon9 Partners. He is an experienced Mortgage and Technology executive. He held executive leadership positions with Plaza Home Mortgage, Option One Mortgage, First NLC Financial Services, loanDepot and Impac Mortgage. Mike received his MSEE degree at Loyola Marymount University and BS in Applied Mathematics/System Engineering at UCLA.

Contact Information –

mwilson@dragon9partners.com

949.306.4719

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