Rob Chrisman, mortgage industry vet and the driving force behind the popular Daily Mortgage News & Commentary email, recently spoke to us about the state of the mortgage industry’s views on innovation. “The industry is ready for change to come from a different source,” Chrisman commented. “And that source could be technology.”
Q: How would you describe the work you do with your email newsletter? How do you choose what to include, and how do you find out what your audience is interested in?
A: The commentary came about because I used to work on a trading desk. Our boss would write a one-paragraph summary of the market, and then when our accounts would call us up, we’d read it to them. When email came about, that made it much easier to pass along that information about the market.
So my background was in capital markets, and as time went on, I established more and more contacts in the industry. I got a very good sense of what’s important to lenders. I think in this industry, Loan Officers don’t always care about the things that capital markets people care about, like convexity or spreads. And capital markets people don’t always care about what LO’s care about. I receive information from a lot of different sources, and I wanted to use it to bridge that gap. I wanted to translate the things I hear into something I’d want to read. And hopefully inform people while being relatively entertaining.
Q: I just read your April Fools edition email — very entertaining!
A: Yeah, we’ll see if I get any calls from the CFPB’s attorneys.
Q: So how do you see the mortgage industry’s attitude towards adopting new technology? And do you see that attitude that changing?
A: When I look at my phone, I probably use 20% of the features. You hear a lot of people saying they never touch most of the buttons on their microwave. People get to a certain level with technology, and they stop.
But when I look at the industry and see the change in the past five or 10 years, it’s amazing. There’s really been a huge advance in terms of the tools that are available. I think lenders may have reached the point I’ve reached with my phone—they’re using the camera. Lenders want tools they can understand and use to help them help their clients, and not make life too difficult. Things that are easy to understand, that help clients and help the loan process — those things are being embraced.
Q: Do you see technological change being driven by in-house development from financial firms, like Quicken’s Rocket, or by external technology companies?
A: An isolated vendor is not going to succeed in isolation. If some company is trying to succeed at this, they’ll need a person from the mortgage industry who recently left the business on staff, to tell them, you know: ‘processors want this,’ or ‘this works in this way.’ Or they’ll need to partner with a lender. The trouble with working with a lender is that lenders are very busy working with their clients. It’s hard for them to find the time to hold another company’s hand, or mentor another company. The vendor would have to be careful in terms of that arrangement.
Q: What do you think about the rise of financial technology focused startups? Are mortgage companies ready to embrace fintech?
A: That’s a good question. There’s a type of person who will readily embrace technology. But then there’s another type of person who’s just going to be more cautious or suspicious about technology. If some brand new company in San Jose says they’ve come up new way to process a loan, and they say that their way makes sense, I don’t think that would be greeted with any more or less suspicion than a new way to process a loan that was invented in-house. It depends more on the individual, and less on where the technology is coming from.
It’s more the person accepting it, not where the idea is coming from. The fact that people will accept new ideas from different sources is good for companies that are looking to get into this space—what really matters is the ideas they’re putting forth, not where they’re coming from.
Q: Are there trends you’re seeing in the type of technology that is being adopted by the mortgage industry?
A: The technology has to be relevant to the industry. It has to make dealing with the consumer easier or better. People want things that both help consumers, and help compliance. Definitely people are interested in tools to make compliance quicker and easier.
Q: Any last thoughts, or anything we didn’t touch on about how the mortgage industry is looking at technology?
A: In general, this industry has undergone a lot of change recently, and it hasn’t been about cool new tools. It’s been about regulatory change. I think the industry is hungry for change and innovation to come from a different source, not just from regulation.
Change in this industry usually comes from a few different sources, either from clients, from regulation, from the market or from tech. We’ve been so focused on regulatory change lately that change coming from another source would be a breath of fresh air. I think the industry is ready to do things that will help other parts of the market, and not just do things because they’re being told to by the CFPB or the DoJ. I think the industry is looking forward to change coming from another source other than regulation. That change could be from technology.