How FinTech Startups are Disrupting the Mortgage Industry

By inflooens on December 24, 2020

How FinTech Startups are Disrupting the Mortgage Industry

 

FinTech startups are taking the world of Mortgage LOS by storm. With more than 6 million home sales every year, loan origination processes are in dire need of technology-based solutions, that FinTech startups are providing. In an economic situation where the residential real estate industry and the mortgage loan originators are exploring options to make the market more lucrative for buyers, FinTech startups are spearheading the shift. In this blog, we will discuss how FinTech startups are disrupting the Mortgage industry and Mortgage LOS.

Mortgage Underwriting is a component of Mortgage LOS. The stages involved in the Loan Origination System are below.

The Mortgage Process and Loan Origination

The mortgage lifecycle, especially the loan origination process, is a combination of many complex activities. This includes the application, underwriting, documentation, verification, appraisal, and closing. The mortgage process also involves many players like the buyer, seller, broker, mortgage officer, lender, escrow agent, insurance provider, appraiser, etc. The entire process is highly regulated by federal and state agencies. The regulated step-by-step flow of loan origination is time-consuming and tedious. While some tasks are entrusted to in-person interactions, there are many aspects of the Mortgage LOS that are being improved by FinTech startups. Fierce competition and demand for better processes by customers are driving the change in Mortgage LOS. As indicated in a survey by FannieMae, more than 70% of respondents prefer online application and document submission. Customers also prefer digital channels for pre-approval.

customer preferences for mortgage processes

Image 1 Customer preferences for Mortgage Processes Image source: https://capmrkt.fanniemae.com/resources/file/research/housingsurvey/pdf/nhs-special-topic-digital-mortgage-process.pdf

FinTech Startups to the rescue

FinTech startups, in-general are creating a big impact on the investor circuit. According to a report in CBInsights, over $12.2 billion were raised in equity funding by 44 FinTech startups collectively. Investment in FinTech has tremendously increased in the past decade.

Total value of investments into Fintech companies worldwide from 2010 to 2019

Image 2 - Total value of investments into Fintech companies worldwide from 2010 to 2019 Image: https://www.statista.com/statistics/719385/investments-into-fintech-companies-globally/

FinTech startups initially came on the mortgage LOS scene a few years ago and began changing the way the mortgage industry usually operates. The primary benefits of technology were seen in the form of efficient processes, reduction in manual tasks with process automation, less paperwork with paperless applications, and reduced time and costs with automation. As technology has progressed, so have FinTech startups that are now bringing emerging technologies to the mortgage sector to provide even more sophisticated solutions for mortgage process and loan origination. Many FinTech startups are delivering platforms that focus on the broader objective of creating products and services that increase housing affordability by reducing processing costs of the mortgage lifecycle. Let’s have a look at the benefits of the latest in Mortgage technology. Read more about Technology Trends in the Mortgage Industry in our previous blog.

  • 1. Next Level Digitalization

    FinTech startups provide platforms that eliminate the need for expensive legacy infrastructure. This frees up money to be invested in product improvement, enhanced functionality, and elevated user experience. Mortgage LOS platforms facilitate quick decision-making that increases efficiency and reduces human error. As a result, loan officers can dedicate more time to interacting with customers and create a positive borrowing experience. inflooens mortgage LOS is a reliable and efficient platform that helps transform the mortgage lifecycle.
  • 2. User Experience

    Smartphones and computers are omnipresent. Many borrowers now research and apply for mortgages online. Engaging users on a communication channel of their preference is of great value. The same is true for loan officers who can leverage the power of portable devices and online platforms to have information at their fingertips. FinTech startups are making it possible to schedule appointments and calls, apply for mortgages, strategize and share mortgage pricing, and track sales teams' performance on a reliable and efficient platform. inflooens mortgage LOS is a discoverable and easy-to-use platform that delivers an enhanced user experience.
  • 3. Predictive Data Analytics

    Data is a treasured commodity in any industry if leveraged properly. FinTech startups are developing Mortgage LOS platforms with intuitive analysis and intelligent insights. These tools use emerging technologies like artificial intelligence and machine learning to provide predictive analytics that can be used by loan officers and management to improve their performance and customer experience. inflooens is a FinTech startup that has the best Mortgage LOS to deliver valuable insights with predictive analytics.
  • 4. Bringing fragmented systems together

    The best mortgage LOS platforms help in bringing together the complex and fragmented tasks of the loan origination process and mortgage lifecycle. FinTech startups are providing solutions that consolidate the huge amount of data involved in the loan origination process. The financial history of an applicant can be instantly made available to loan officers or lenders at the click of a button. This is significant in streamlining backend processes. Learn more about this in our other blog.

    The Future of FinTech and Mortgage LOS

    FinTech startups are playing a critical role in integrating the multiple functions of the mortgage industry and Mortgage LOS. The tides are turning and lenders and customers are accepting the change for the better. Few lenders are already providing digital mortgages and the day doesn’t seem to be far when fully-digital mortgages will be the norm. FinTech startups will continue to transform mortgage processes and loan origination systems by utilizing opportunities that are made possible by technology. Lenders have realized that there is a need to reinvent mortgage LOS to make borrowing more accessible. Here FinTech startups are providing the solution by opening up a new range of possibilities. With companies like inflooens at the forefront of mortgage innovation, the future of FinTech startups seems bright.


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