I recently hosted a really interesting episode of the LodeStar’s Lending Leaders podcast. My special guest was the founder of Mortgage Automation, Babar Chaudhary, and our primary topic of discussion was not only one of my favorite topics but, apparently, one of the hotter topics in the mortgage industry right now: automation. 

Buzzword bingo

As you’ve probably heard or read by now, mortgage lending COOs have been busy and remain focused on “automating anything able to be automated.” Everyone’s driving toward automation. And the goal is everything and anything between “improving efficiencies”, “battling margin compression” and “transforming operations to become much more scalable.”

In other words, it’s become a buzzword. 

What is “automation?”

Babar and I had a lot of fun digging into what the word “automation” really means. And I love his definition: “If you left the office and turned off the lights, everything should keep working as-is.”

Sounds just like most mortgage operations in 2023, right?

Wrong. But we have come a long way, especially at the point of sale and with the quality of most LOS. We’re taking big steps forward with the increased use of open APIs. And bots (Robotic Process Automation) are proving to be extremely useful filling the gaps where there are no other acceptable technology tools available to perform mundane, repetitive tasks being performed by humans (when those humans could be doing much more complex and productive things.). Did you know that, in the course of a single mortgage transaction, the property’s address gets manually entered around 70 times?!

Wow.

From the paper dark ages to…where we are now.

Both Babar and I came into this industry at a time when just about everything was paper-based and manually driven. Email was all but revolutionary in this space. (And the title insurance industry, where I started, was even more archaic!). So the fact that we’re finally moving to redeploy our work force away from time-wasting, mind-numbing but necessary tasks and toward productive functions (like marketing, sales, QC or just good old-fashioned thinking) is quite encouraging. We’re somewhere between those paper pushing dark ages and the most efficient home purchase/mortgage lending process possible. There’s still too much going on by way of manual labor, but it’s improving at an accelerated pace.

Total automation is not the ultimate goal

Babar and I agree that nobody wants a completely automated home buying experience; especially the Millennial generation quickly becoming the largest demographic seeking to purchase homes. Many people want a personable and, more importantly, knowledgeable REALTOR, mortgage broker or loan officer to guide them through the experience, based upon the customer’s needs. They don’t necessarily want to close a loan from an iPad while in line at Starbucks. They do, however, want the keys faster than the typical month-and-a-half dark period that typically ensues from the time of signing a sales agreement and the closing. That includes appraisals that don’t take forever as well as title searches, reports and premiums.  They don’t want endless texts, emails and phone calls asking for social security numbers or dates of birth. 

That’s where hybrid automation comes in.

We’re going in the right direction. We just can’t declare victory and call it a day before we truly get there.

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 “A Tale of Two Mortgages: an original webcomic for the mortgage industry, presented by LodeStar.”  As always, your feedback is welcomed and appreciated!