The digitization of the mortgage loan process, although at times painfully slow, has come a long way. Especially in the past 10 years. And as that digital revolution has unfolded, we’ve seen a few distinctive phases.
Years ago, the slow march towards a “fully automated (or digital)” mortgage process began to accelerate with the introduction of new technologies, such as modern LOS or POS platforms (or closing cost calculators). As adoption became more widespread, and the question became “how shall we automate?” instead of “should we automate?”, the focus shifted to the challenge of disparate systems unable to collaborate—or, operational silos. The natural progression from there evolved to a focus on integrations and “tech stacks.”
We are now moving into a new era of technology, one in which leading mortgage lenders, struggling with days-to-closing averages that stubbornly cling to the mid-50’s, can’t have forms auto-populated fast enough. We’re now officially into the era of “automate everything automatable.” If a process can be completed today in four clicks, the best lenders want it down to two. And it doesn’t matter what technologies are involved—they should work together as one. Finally, the word “seamless” is more than a marketing buzzword. It is, in fact, becoming somewhat of an operating standard.
Up to this point, the majority of combined mortgage technology solutions have relied upon custom integrations to facilitate collaboration between various tech applications. Enter the Application Programming Interface, or API. API, in essence, is a technological “go-between” that allows two or more technologies to easily communicate and work together. It’s more complex than a traditional integration, and requires configuration, rather than customization. It’s not necessarily a new idea—LodeStar has had one for years. But while LodeStar’s closing cost calculator is currently integrated with a number of great LOS and POS, we are also now introducing access to our API, which will allow tech-savvy lenders using complex tools in their pipeline to go from the 5 or 6 click LE our integrated users have to possibly a single click LE (depending on that lender’s technology). And it won’t require a custom integration.
From a practical perspective, API access could allow a lender to pull credit automatically. Or to pull closing fees at numerous stages of the transaction. It will eliminate “button pressing” and “key strokes,” advancing the overall production process and finally eliminating some of the most archaic pain points in the pipeline. And it will help transform the idea of “seamless” into reality.
The API is the gateway to fully formed and collaborative tech stacks. And we’re just starting to realize its full potential. It’s also a competitive advantage for tech-savvy lenders who combine their own, proprietary solutions with effective, existing solutions. In fact, we’re not that far from a market when “tech-savvy” isn’t reserved for the very best lenders, but instead, for any lenders wishing to compete at all. So if you’re not familiar with the concept, it’s time to get familiar!
We at LodeStar are grateful to all of our clients, friends and colleagues who take the time to view Deeper Thoughts. Please consider having a look as well at some of our other great content, including our podcast, “LodeStar’s Lending Leaders,” and our new graphic-oriented series, “A Tale of Two Mortgages.”
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