Question for Realtors+MLO's - will Tech automation takeover?

Question

Answer

Rocket Mortgage is garbage. They arnt putting anyone out of business. They probably screw up 10% of transactions and their fees and rates are high.

Answer

@Alexander Levit There is nothing really unique about Rocket Mortgage anyways. It's a marketing ploy by Quicken to get people to use them, but it is technology available to any lender. I've seen statistics recently that Millennials are actually showing a higher rate of working face-to-face than prior generations. Yes we're technologically adept, but I think Millennials appreciate a certain trust factor that comes from knowing who they're working with.To answer your question, could technology totally replace the loan officer in some cases? Sure. Maybe on your vanilla, W-2, high income, high credit, high down payment, we couldn't possibly screw this up type cases. The problem is that there are so many cases that don't fit that box, so there needs to be a human element to navigate the complications that come up. I don't think that will ever go away.

Answer

Other direction, actually. It's more or less gotten to the point where you cannot do any serious volume as a lender without having at least one full time assistant, which wasn't the case in the 90s or 2000s. Every time new tech comes out, Fannie starts requiring that it be used in every case on every loan file, even when it takes time instead of saving time. Let's pick an example: bank statements. For example "month-to-date transaction history from your online banking" being a routine requirement 2 or 3 times in a single transaction would have been impossible before the advent of online banking, but now it's the norm. Back before online banking, the lender would confirm that you have the money, confirm that the expected sum arrived in escrow, and that was it. No transaction histories, no updated this or that. Then: "Do you have $200k (verify and document) and did $200k get wired to escrow (verify and document)? Great, we're done." Now: "Do you have $200k? Have you had it for two months? Were there any large deposits that we need you to log onto your bank and get images of the checks for? Did you wire out $200k on 5/5/2018? Did exactly $200k arrive in escrow on 5/5/2018? Why did the money clear your account on 5/8 but not arrive until 5/10, was there a 3rd bank involved? Do all the account numbers line up? If they do not line up, which account did the funds pass through? Do we have two months of bank statements for those accounts? Are there any large deposits there, that need to be sourced? Oh, it came from your credit union -- we need two months of those bank statements, can you send them? Oh, I see some checks deposited. Please send images of all those checks from your online banking." - and so on (This is a slight exaggeration -- well, maybe not... I'll let the posters below chime in on that one)So now that we have online banking, it's actually more work for the borrower, and more work for the lender. I'm not even going to start on TRID, CFPB, and Dodd Frank. But, hey, my assistant has job security.

Answer

@Alexander Levit I am in Mortgage industry from last 15+ years. When I started everything was manually:- taking the application--sending by fax or AE was picking up from the branch--submit to LP---going to U/W--process was taking about 25-30 days or even we did close loans faster if we have too, With modern technology which you mention--from MLO-U/W so many links has been added on the name of technology---we are still taking 25-30 days average if go with flow ---we can still close fast if required. Where the technology is helping us? Just a thought nothing against technology nor want to debate on it. I think technology has add more jobs in our industry.

Answer

@Alexander Levit There are a few different structures in the mortgage lending world. Brokers can originate on behalf of any number of wholesale lenders, so the options are unlimited I suppose. In my opinion there are really only a handful of wholesale lenders worth brokering for because their rates are going to be relatively similar, so you narrow down to the ones who execute well and the only thing that separates them are niche programs they offer or willingness to deal with certain borrower characteristics.

Answer

@Alexander Levit Part of the timeline right now is compliance driven. The fastest you can possible accomplish the process right now is 8 days because that is what is outlined by the CFPB. Outside of that, probably your next biggest time driver is appraisals. Aside from going 100% automated with appraisals, you won't change the supply/demand effect there so that will be a limiting factor. Then the next biggest time factor is probably the borrower themselves and how timely they are at responding to requests for certain documentation. I think those last two variables are more difficult to control, so the process can be much quicker but is not always predictable no matter how well we may set expectations up front.As far as your experience with lending, a lot of that scrutiny is once again driven by compliance. It's not that we want to grill you on every little financial detail. It's that certain government entities have said that if we want to comply with lending policies, we must deal with certain financial details. Now your lender has a big part in making that process smooth and easy for you, but it's likely not unique to that specific lender. There are lots of people who walk away from the process feeling good about it. That's a huge part of my job - making the experience awesome. And as a result, I have a lot of people who come back and work with me repeatedly. So maybe the key for you is finding a lender you enjoy working with who has their ducks in a row.

Answer

Thanks for all your replies+input. Curious what your thoughts are on potential earnings when compared to Real Estate Agents? As a LO you also get a % of the Mortgage loan you bring in? So I'm assuming for jumbo loans, you earn a healthy sized %? Where do you feel you can earn more with the same hustle or dedication & determination applied?

Answer

Thanks Jared. If you work for a single brokerage as a LMO, do you have access to a wide range of lending sources or are your restricted to that specific brokerages sole lending source? I'm assuming you have a larger selection to choice from, with possibly more favorable rates & terms, if your able to have a wider reach to multiple lending sources? Are LMO's restricted or is there a career path to having greater variety for your clients?

Answer

@Alexander Levit I can't speak for other industries but in our industry yes did add so many jobs on the name of compliance and technology to speed up the process. Yes, security is main issue so we as lender has to be careful. Faster and efficient--------I always has Q?

Answer

Thanks for the reply. So you feel even with technology prevailing & also progressing, there will always be a human service need. I'm surprised that technology hasn't expedited the turnaround time...What about the paperwork submissions of the client, isn't it more easier, efficient to submit, securely of course, online?