Moving Mortgage Technology to the Smart Phone

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May 25, 2011 | COMMENTS

Early adopters are using smartphones and tablet computers to improve efficiency and facilitate daily tasks outside the office. Mortgage appraisers are trading in clipboards for iPads. Loan officers and business-development staff are spending more time out of the office, cultivating personal relationships with small business owners.

The potential for a mobile mortgage industry doesn't stop with industry professionals. Already, borrowers are searching for mortgage rates on websites optimized for viewing on a mobile device and even filling out mortgage applications on tablets, according to the March edition of Mortgage Technology.

But the way mobile software is used in mortgage lending is very different than in other fields of financial services. While industry participants have high hopes for mobile mortgage technology, questions remain concerning how the power of this burgeoning innovation will be harnessed and implemented for industry-wide adoption.

Arguably one of the biggest unanswered questions about mobile mortgage technology is not only how originators will use devices and software in their day-to-day operations, but when will it reach widespread adoption.

Jeff Coward is vice president of mortgage and real estate lending at the Virginia Credit Union in Richmond. The credit union has seven branches and ATM locations around the state and employees six loan officers. Looking to improve efficiency and increase its origination business, the credit union is actively shopping for a new loan origination system. The process has served as further affirmation of his belief that mobile technology is the next big thing.

"It's very important for mortgage lenders to adopt mobile because that’s how the technology is evolving,” Coward tells Mortgage Technology. “Everybody wants to talk about loan officers using laptops, but the reality is an iPad can give you as much functionality as a laptop and doesn't cost nearly as much.”

“Unlike a laptop, you don’t have to be tethered to a wire with an iPad,” says Coward. “The iPad is more portable and easier to put apps on. That seems to be the way it’s going to go,” he adds.

For a community-oriented lender like Virginia Credit Union, the level of member service that loan officers provide is how it can differentiate itself from competitors—the large megabanks.

That means empowering loan officers to go out in the field to meet members where they want, whether that’s at work, a neighborhood coffee shop, or even an open house for a property on sale. And lenders realize that once a borrower chooses to do business with them, they need to give customers online tools so they can keep track of the mortgage application process.

In a climate where borrowers have essentially two mortgage options—a conforming loan sold to Fannie Mae or Freddie Mac or one backed by the Federal Housing Administration—member service and speed are the value-adds that differentiate lenders.

“I don’t see why a loan officer wouldn’t be able to sit down and take an application on an iPad,” says Coward. “And if the applicant has a mobile device, they should be able to submit a loan application that way if they want to.”

The credit union’s loan officers currently have laptops that get replaced about every three years. In the next cycle, Coward said it’s likely the credit union will look at tablet devices not just for origination employees, but also for its executives and other managers. The devices are cheaper than laptop computers and don’t necessarily demand a cellular data service, particularly if the user is going to have regular access to broadband Wi-Fi connections.

“It makes a lot of sense to give this tool to a board member or executive who’s doing light spreadsheet work, e-mailing, reading, and maybe even some document preparation. The iPad fits the bill,” he says.

The biggest hurdle lenders have to overcome with mobile technology is concerns about data security, says Coward. For lenders to begin deploying loan officers and other employees in the field to use mobile devices in their interactions with members, they have to be convinced that the sensitive data they’re collecting is encrypted and secure, both for wireless transmissions and in case a device is stolen.

“It’s a matter of getting folks comfortable with the idea. When the iPad came out, people thought of them as toys. With the proliferation of apps on it, people are realizing that this thing has business capabilities,” Coward notes.

“Once IT staffs start playing around with them and test them out and when customers like myself say to vendors, ‘I want to have a mobile app for your POS system, build it,’ then mortgage departments like ours will see that this is something that will improve our members’ experience,” Coward adds.

The earliest uses of loan origination system software on tablet hardware have come in the form of hosted technology accessible through Web browsers. But it’s conceivable that vendors could begin adapting the origination technology in an application format, either through consumer-facing app stores or with the enterprise licenses that companies like Apple issue for internal business software development.

Ultimately, the use of tablet devices could usher in greater adoption of paperless, electronically signed closing documents. A blog that studies the patent activity of Apple recently uncovered an application filed in 2008 for a stylus device for use on a touchscreen. Apple doesn’t currently offer a pen tool for the iPad, but the patent indicates it could be a future offering. That combination could be a catalyst for greater e-mortgage originations.