The COVID-19 pandemic is making changes throughout every industry as businesses and consumers try to navigate the new normal. Mortgage lending and real estate top the list for technological advances.
People are still working, seeking home loans, and purchasing real estate for commercial and residential purposes. What’s changing is how they accomplish financial transactions and sales. Many 2020 trends are a result of social distancing and limiting in-person contact.
The real estate industry, including mortgage lending, has always been a people-oriented industry. Buyers would typically go to their bank or broker, shake hands, sit down, and go over financial records for an hour.
Depending on the complexity of needs, this process could take several hours or multiple appointments involving several or more loan specialists.
This is just the first step of the process. Buyers meet with real estate agents, visit several homes or buildings, exchange pleasantries with property owners, and head back to their financing professionals to make the purchase.
From here, you can repeat several of the original steps regarding finances, documents, and signatures.
In the age of COVID-19, these are too many face-to-face interactions that increase exposure for all parties. Industry leaders realized quickly that they need to streamline these transactions for minimal hands-on work that doesn’t extend the already lengthy process of purchasing property.
Enter automation. With the use of AI, or artificial intelligence, financers can remove the human paperwork element without dehumanizing the process and save everyone’s time and money.
It may seem that the vertical assembly line for mortgages and home buying reduces the personal touch consumers expect with large purchases. However, loan officers, brokers, and real estate agents can still offer warm, human interaction in phone calls, including video chats and through email and other forms of digital communication.
Remote Online Notarization
When the pandemic hit, mortgage lenders, loan specialists, and real estate agents hit a wall with one essential part of their job-notarization.
A simple purchase document might require 10 to 15 signatures from each purchaser, including married couples. Even a refinance loan with two signers can add up to over 20 notarized pages.
Multiple sales and more complicated loans for businesses and other enterprises can see double or triple that number.
International transactions and similar situations have been pushing for remote online notarization for years. COVID-19 has increased this need by ten-fold. Businesses and consumers need a path that allows for verified signatures without dangerous interactions.
Enter live video conferencing where all can view the transactions.
By handling information via video, the lenders and purchasers satisfy all regulatory compliance. Additionally, a physical record of all participants is available for years in the future.
Remote online notarization adds more security and documentation than in-person transactions. For many people in the industry, this bonus offers more protection for all parties involved in the sale.
Fully Digital Service
Even with all the changes from technology over the past few decades, nothing has removed the human element from securing a mortgage. Applicants can apply over the phone or online.
Still, signatures and the need for original documentation has always required some in-person interactions. In a world where people are always seeking instant gratification, the delays that involve waiting for meetings and signatures can cost some lenders money.
Companies and consumers have been seeking these changes since before COVID-19. However, the pandemic has sent the quest for complete digitization or end-to-end digital home purchase transactions on hyperspeed.
These technological advances are ideal for many in the mortgage industry, including small lenders that have traditionally had a hard time competing with large financial institutions.
In addition to making businesses and consumers happy, streamlining the process with technology can reduce errors. Most mistakes are caused by people, even when inputting information. Using advances such as AI and videoconferencing can reduce and also eliminate most errors, saving time and money for everyone.
Some of these changes may not be necessary when a vaccine and effective treatment is available for COVID-19. However, don’t expect these technological advances to go away.
As lenders, sellers, and buyers find these more effective ways to complete transactions, many of the changes that streamline the process for all parties are most likely here to stay.