25 Jul Wall Street Ready To Close Deals As Mortgages Go Digital
Wall Street Ready To Close Deals As Mortgages Go Digital
By Yizhu Wang, with analytics by Philip Segal
Getting a mortgage is often a hassle for borrowers as well as loan officers who are buried in redundant paperwork. Entrepreneurs, many of whom suffered through the process of getting mortgages themselves, are helping tackle the problem.
With the help of automated software, consumers no longer have to submit W-2 forms multiple times. Loan officers can pull reliable credit data online, and borrowers in certain states can even sign their closing documents via webcam using a remote notary public.
The drive to modernize the mortgage industry is expected to result in roll-ups of the more promising digital players by private equity firms and strategics. The space is fragmented with thousands of vendors, many with only one or two product lines, says John Guzzo, managing director at boutique investment bank Berkery Noyes.
The Federal Reserve wrote in a 2018 report that lenders leveraging technology reduced mortgage processing time by about 10 days, or 20% of the average processing time, compared with traditional methods.
“The digital tsunami that’s hitting the mortgage space is significant and real. There is going to be some consolidation and acquisitions,” says Michael Schreck, CEO of mortgage tech company Cloudvirga.