Although they may boast lightning-fast mortgage origination services, they aren’t immune to the same delays as traditional originators, according to one industry veteran.
“The first large-scale lender to have self-service technology is Quicken. Still, Rocket Mortgage has a loan runway which is similar to other mortgage originators and doesn’t take less than 40 days to close even though the application process may be speedy,” Debbie Hoffman, chief legal officer, for Digital Risk, wrote in an email to Mortgage Professional America. “The reason is because Quicken, too, has to comply with regulatory requirements, including TRID, for instance. Reality awaits this potential class of homebuyers.”
Launched in November, Rocket Mortgage was launched by Quicken loans with the hope of cuting out loan officer middlemen.
Quicken claims the online application platform allows would-be borrowers can complete applications in mere minutes. It purports to be more than just an online application service; it also verifies information and provides a conditional approval similar to one provided by a loan officer.
However, while some homebuyers may eschew the services of an originator – and the value they add – in the hopes of expediting the mortgage origination process through products such as Rocket Mortgage, they will likely run into the same sort of waiting periods.
Still, there’s no question these online originators will put pressure on originators, according to Hoffman.
After all, the mortgage industry is like any other: Players must adapt or die.
“Self-service technology and the mortgage industry have challenges, but are the growing trend,” Hoffman wrote. “We will see more and more originators who have automated origination and servicing platforms.”
Self-service online mortgage services are all the rage, but this why they don’t quite signal the death knell for traditional originators.