Mortgage Services

While at the MBA’s 95th Annual Convention & Expo, I was waiting in line to get my picture snapped with Erik Estrada (seemed like the thing to do) and I could not help but think how the mortgage industry has changed since Mr. Estrada appeared on CHiPs in the late 1970’s as officer Francis “Ponch” Poncherello.  For those too young, CHiPs was a TV series that followed the lives of two motorcycle police officers of the California Highway Patrol.

Now, back to the mortgage industry. With the “mortgage meltdown” having been front and center of all major news outlets over the last year, the MBA took a new angle with its theme for this year, “Winning Strategies for the New Age.”   During the course of the past year, most people in the US have been exposed to terms, such as Negative Amortization (NegAm), loan modifications, Collateralized Debt Obligations (CDO), Mortgage Backed Securities (MBS), etc. However, think about where the industry was back in the days of CHiPs….

• Savings and loans were the only institutions issuing residential mortgages
• Interest rates for home loans were in double digits
• Loan products consisted of a 30-year fixed rate mortgage
• There was no private mortgage insurance (PMI) because at least 20% of the purchase price was typically required for a down payment
• Securitization was in its infancy, having now grown from being non-existent in 1970 to a multi-trillion dollar industry today

Is it a contrast? Or, are times today becoming similar to the conditions in the 70’s? In today’s environment mortgage lenders are re-evaluating how to stay competitive. Mortgage lending has moved to a “flight to quality” with conforming loan products and most lenders are not offering the exotic loans of the past few years.  Interest rates have remained historically low - even with the recent crisis - and homeownership has risen dramatically since Ponch cruised the California highways.

Obviously, the technology used by mortgage lenders in the 70’s would now be considered very archaic.  At the show, mortgage technology was prevalent with systems for fraud, transparency, and electronic signature highlighted throughout the three day conference.  Vendors and consultants offered, as stated by the conference prospectus, “strategic options to business challenges.” At Xerox Mortgage Services, we offer a good strategic option for lenders.  Our solution, BlitzDocs®, provides collaborative electronic loan folders and e-signature technology that enables lenders to streamline processes and be competitive.

I am not a mortgage banker; I just help provide paperless and electronic signing technology to the industry.  Let me know what you think…