If you own a home, chances are you are already familiar with the process of filing a mortgage. After many meetings and a large paper trail, the bank will finally give you a loan for the property. Even as other areas of financial paperwork were gradually put online, mortgages remained one of the last holdouts in banking to rely primarily on paper. But the COVID-19 pandemic changed all that.
In the past few years, and in particular since March 2020, many companies and corporate projects have sprung up across the world which allow the process of filing for mortgage loans to be done remotely, quickly, and conveniently. In reaction to the changed circumstances around social distancing, the legislative environment has also changed, with such large jurisdictions as the US state of California allowing for convenient innovations in filing such as remote notarization, removing the need for various physical stops on the paper trail. This automation can be considered to be the catalyst for the development of modern mortgage tech: technology in the form of apps and websites applied to the facilitation of the mortgage process for everyone involved.
Studies show that this automation has increased the speed of applications for mortgage loans and decreased the default rate. There are several reasons for this. For one thing, recent improvements in data analytics allow lenders and brokers to tailor their recommendations as precisely as possible to fit a user’s financial profile, leading to a better fit. On the borrower’s side, shopping platforms allow easy comparison of the terms of different loans. In addition, improvements in AI allow for automatic verification and proofreading of various documents, leading to fewer administrative errors and therefore a smoother lending process, alongside chatbot technology which can answer questions on the part of different sides with less need for a human representative. These are only a few examples of how the analytical and algorithmic methods already being applied to other parts of the Internet are being applied to the mortgage industry. They allow for increased automation, efficiency, and accuracy at every step of the mortgage application process.
To conclude, the development of mortgage technology was catalyzed by the COVID-19 pandemic. Since then, the mortgage industry has had to make major changes to adopt technology that was already revolutionizing various other industries. Fortunately for everyone, this technology allows people to get mortgages faster, more conveniently, and more accurately than before.