E-mortgage has simplified and shortened loan origination cycles. Over the last few years, the United States government has ratified several laws for online lending in all jurisdictions and e-mortgage thus offers a robust legal structure for processing loans.

In 2006, a research was conducted by Fannie Mae on the US mortgage industry. It revealed that more than 70% lending institutions were willing to embrace e-signature, a vital element of e-mortgage. Analysts say although most lenders are willing to go the e-mortgage way due to compliance issues, they cannot ignore the benefit of increased market share accruing from the new infrastructure.

Consumers demand convenience. They are increasingly choosing lenders offering advantages of seamless loan processing and quick interaction via desktop and mobile. Of late, it has been noticed that lending institutions are describing themselves as ‘techfin’ companies. Techfin companies are institutions that prioritise technology to improve the user experience over regulatory compliance. To succeed, the entire framework of e-mortgage needs to be in sync with the lender’s business objectives.

E-mortgage or mortgage management software is providing techfin lenders with better data collation, quicker execution of loans, shorter loan cycles, condensed costs due to automation, and better chances of improving customer service. The companies are recording exceptionally low default ratios as they keep winning the market shares of other industry players.

An article published in Bloomberg News early this year revealed the exceptional success of techfin company SoFi. CEO Mike Cagney, during the interview, said that the amount of mortgage transactions the company is doing is coming up to $50 million every month. He also added that a lot of people continue to doubt how it works. However, SoFi is progressing amazingly. It is currently working with numerous lenders with different types of properties, who have committed to activating the structure of e-mortgage over the coming years.

SoFi is an online personal finance company taking an unprecedented approach to lending and wealth management. We’ve replaced the impersonal, transactional bank experience with a long-term partnership, enabling our members to realise the full potential of their money, careers and relationships. Our members constantly push the limits of what life offers. Whether looking to refinance their student loans, buy their dream home, or simply seek advice as they ascend in their careers, SoFi provides the products and tools to match their ambitions and propel them to new levels of financial greatness.

SoFi was founded by a team of Stanford Graduate School of Business (GSB) students in the Fall of 2011. Our backers include leading venture and institutional investors, including SoftBank, Baseline Ventures, Peter Thiel, Discovery, Third Point Ventures, and Joe Chen, CEO of Renren.

Let’s look at a similar difference of perceptions on the housing front. Co-director and chief risk officer at Center on Housing Risk, Edward Pinto, who leans to the conservative side when it comes to assessing markets, believes that the average borrower is ill-served by the government’s push to broaden home ownership. However, it is important to note that many FHA loans have debt-to-income ratios of 55% or more. Moreover, the DTI ratios only consider housing debt, not all other debts of the borrower; many borrowers also use gift funds for the down payment. (Source)

Customer experiences are built gradually. However, it is important to use the tools that speed up loan processing and make the whole process easier for borrowers. Empathy for them is of paramount importance and it should be palpable through the way you sell the mortgage. The Darwinian principle of survival of the fittest applies to lending institutions as well. Those that are quick and agile in reinventing themselves with newer technologies will survive the market evolution. Others are destined to perish.