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As we enter the new year, most people are talking about what they want to improve about themselves, but will there be any improvements to the cumbersome origination process?
During the holiday lull, I found this article about the future of underwriting to be interesting as the industry tries to make loans as digital and fast as possible for the consumer. Quicken released their digital mortgage platform almost 2 years ago but the industry has not seen a massive overhaul to the process as one might have expected. Borrowers want everything at the touch of a button but are still generally shocked by the document-heavy process to get a loan. Companies are coming out with digital origination processes, promising instant underwriting and no effort to the consumer, but can they scale that model to everyone?
Everything sounds great on paper until you get down to the details. Income verification alone can be tedious for even the simplest, W2 borrower who may not be fortunate enough to work for an employer signed up with one of the main income verification services. The Work Number® is the largest income verification service currently on the market, with records for over 5,500 employers nationwide and 82% of fortune 500 companies, according to their website. While many borrowers will be able to use this service to verify their income, millions will be unable to utilize the instant verification services and will have to revert to traditional verification methods. The small business administration released these figures in 2016 showing that over 56 million employees are employed by small businesses. Most businesses use some payroll service, but some are still handwriting paystubs, and many are not signed up with large verifiers. How will the industry be able to adapt to the digital age when we cannot standardize the verification process?
As we continue to bring our industry up to date with the newest technology, everyone will say they have the latest and greatest to get your loan done faster, but I have yet to see anyone come up with something that can truly be applied to all borrowers. As the article mentions, and we underwriters can tell you, every borrower is unique. Coming up with a streamlined, digital process for everyone is where we should be going, but how can we get there? What are your thoughts?
As for me, my New Year’s resolution is to learn to meditate. Starting each day with a calm, positive outlook can only bring good things for the year. I wish everyone a happy, healthy new year and remember to change the year on your dates!
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.