Hello, LOs!
Hope you had a nice weekend. I spent mine looking at properties in the Poconos.
Between showings, I thought a lot about a conversation I had on Friday with Tim Mayopoulos, the current president of Blend Labs Inc. and the former president and CEO of Fannie Mae.
We of course talked about the vendor's IPO (Blend was valued at around $4.6 billion at the close of trading on Friday), but I was much more interested in getting his perspective on how technology will soon change the lending experience for not just the consumer, but for the LO as well.
"I think we are going to continue to see a very steady trend towards digitizing every aspect of [the mortgage] process," Mayopoulos told me. "I think we're gonna find ways to streamline and fast-track certain kinds of loans – you know, a standard conventional loan will probably get applied for, underwritten and fulfilled, really in a much faster, very streamlined way, with very little, if any, involvement by a loan officer or loan team."
He continued: "And that doesn't mean that the industry will be cutting corners or that the quality of those loans will be any less, because we are now capable as an industry of tapping into first party reliable data, verified data, so that, you know, everybody in the chain from the lender to the ultimate holder of the credit risk, whether that's Fannie Mae or Freddie Mac or somebody else, has transparency into exactly what's in those loans."
Mayopoulos said one of the reasons he got into this part of the business was to reduce costs for consumers. "Obviously, it would also bring the cost down for the lender, but if the lender incurs less costs, hopefully, many of those savings can be passed along to the consumer.... there are still far too many people involved, too many manual processes involved in underwriting, fulfilling a mortgage. And as the technology improves, and as we become as an industry much more efficient and streamlined and the way we do this, I believe that the cost of origination can come down substantially. And I think that will redound to the benefit of both lenders and consumers."
LOs, I'd love to hear your thoughts on Mayopoulos's comments. Do you believe the technology currently exists for lenders to execute conventional loans without much/any involvement from LOs? Are there greater or fewer risks to doing so? Finally, what do you think could/should be done to reduce costs to the consumer?
Please message me anonymously with your thoughts at jkleimann@housingwire.com.
James Kleimann
Managing Editor, HousingWire
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