Exec helps interpret tech for the industry
More than 12 years ago, Richard Hill (pictured) became vice president of industry technology for the Mortgage Bankers Association – a national group that represents the real estate financing industry.
Back then, as he recalled, the industry viewed technology much differently than it does today. This was in the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed to prevent another financial industry meltdown like the one that struck in 2007-2008.
“It’s not the exciting part of technology,” Hill recalled. “The focus 12 years ago was really around ‘how do I make sure I stay in business by originating a compliant loan, and use technology to do that?’”
Today, the approach to technology has changed, to say the least.
“The whole consumer experience is like Amazon for retail ... in the sense that I don’t have to go to the store. I don’t have to go to the lender’s office anymore. All this experience, at least at the front end, I can do online,” Hill observed. “It’s pretty transformative.”
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Hill focuses in his job on what’s going on with technology in the industry. He also works with MBA policy colleagues to help them lobby for regulation that doesn’t adversely affect technology improvements the industry needs.
Another aspect of his role: to inform the MBA’s membership about technology trends and issues. Membership includes more than 2,000 companies in all aspects of real estate finance, including mortgage banks, mortgage brokers, commercial banks, thrifts, REITs, Wall Street conduits, life insurance companies, credit unions and others in the mortgage lending industry.
Hill said his broader role is to project new technology ideas forward, exploring new concepts and how the industry can benefit.
The MBA is “turning that into workshops, webinars and conference content, trying to make sure that we can explain these emerging technologies to our industry so they can start to look at them and perhaps consider how to take advantage of them if they choose to,” Hill said.
Technology now
If mortgage industry technology 12 years ago was simply functional, today it has become transformative, Hill observed.
Take AI. Hill noted that the industry is using it to create a drastically different user experience than in the past, such as with chatbots.
“Let’s say you’re in a user system, and you’re cycling back and forth. The AI is paying attention” to things such as customer problems and even anticipating detailed questions. Hill noted.
Today, he said, the consumer side of the mortgage industry has enjoyed prolific use of technology. For example, a lender more than a decade ago might take down information over the phone and then validate it after the fact, or the customer would fax details and the process would go on and on. Today it is increasingly digital.
“I can sit here at home and still apply for a loan. I don’t have to go get all of my papers anymore. Or if I do, maybe I upload them into a portal, but I don’t have to fax them to you,” Hill said. “The entire consumer experience, especially the application and early part of the process – that has really changed.”
Bigger gains with customer-facing tech
Technology gains have been more rapid on the consumer side of the business than in the back office, Hill observed.
“Lenders’ adoption of new technologies has been much more consumer facing/point of sale – things that help them get the customer or helping with the application,” he said. “I would say it has been less so in the back office … to make the workflow easier for the loan processor, for example.”
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Also focusing more on the back end would be transformative and positive, Hill said.
“We still have a lot of going back and forth,” he said. “An underwriter might touch the same loan four or five times, and it’s because it’s not a complete file when it gets to an underwriter … it shouldn’t show up to an underwriter’s desk until it's in a form that they can write to do what they need to do.”
The reality is that companies have a certain amount of money to focus on digital improvements so they must prioritize. Devoting primary tech attention to a customer makes sense, he said.
“If you don’t bring in the customer, then you don’t have anything for your back office to work on, so I understand the focus on the front end,” Hill noted.
The future
In the end, tech improvements are numerous, and Hill predicts the mortgage industry will reach new heights of digital improvements through steady, gradual changes.
Beyond wider use of AI, he expects some lasting changes. Among them: the idea of a remote notary.
“You’re going to still have people who do stuff by paper,” he said. But “we’re going to see a heck of a lot more digital closings which will be done through remote notary.”
