Technological advancements lend themselves to countless consumer-facing industries, even transforming ones such as hospitality, travel and banking.

But if you can manage numerous accounts online without ever having to sit down for a face-to-face conversation with another human, why is the process of getting a mortgage so different?

The real estate financing process is often expected to be a series of in-person meetings at banks or other offices, complete with scanning documents of financial background information and a slow approval process.

One possible reason the mortgage industry has been slow to adopt new technology is because the housing crisis caused lenders to clam up, explains Tom Rhodes, CEO of Sente Mortgage, a Texas-based lender that opened just in time for the housing bubble burst in 2007.

But those days are rapidly changing. Lenders are beginning to embrace more new technology, and new lenders are even entering the game based around an automated platform.

“In the last 18 months, we’ve really started seeing where things have gotten easier,” Rhodes says. “Companies are using big data, companies are using more automated systems and processes and using technology to produce a smoother experience.”

[Read: How Moving to a New Home Affects Your Taxes.]

Here are four things you should know about how technology is now playing a part in your mortgage process.

Options go beyond the online form. An important part of the mortgage industry’s evolution is automation – not just allowing you to fill out forms online, but also granting access to financial and employment backgrounds without requiring repetitive work for you.

Rather than having to provide all the same detailed pieces of information you would when filling out a paper form, your communication with the lender is more about borrowing programs that would fit best and not what details you have or haven’t provided yet.

By streamlining that process, mortgage lending moves away from a transactional business and “turns into a relationship business,” says Dom Marchetti, chief technology officer for loanDepot, a technology-focused lender.

Other more traditional lenders – banks in particular – are automating their processes as well. One way is by utilizing Roostify, a mortgage technology company that provides an automated platform for lenders.

“It creates an online experience for the consumer, from potentially the moment they express interest in learning more about the lender’s offerings to the moment that they sign their final closing documents,” says Rajesh Bhat, CEO and co-founder of Roostify.

From there, the online platforms are also designed to provide detailed updates about your application and the approval process and often allow you to e-sign documents so you avoid adding new meetings to your existing list of sit-downs throughout the homebuying process.

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Face-to-face options remain. Of course, there’s no way every consumer looking to purchase a home is going to feel comfortable getting a mortgage online, whether it’s a tech-literacy issue or simply because you may enjoy an in-person conversation.

“Every bank needs to provide that option to support consumers who don’t wish to engage online at all – you have to be able to support that,” Bhat says.

Even the lenders focused on automated processes, such as Rocket Mortgage by Quicken Loans or loanDepot, offer human interaction to help you each step of the way.

“We get to interact with you on your terms,” Marchetti says of loanDepot’s platform.

Security and protection is a major focus. We hear almost every day about a new data hack in a retailer, firm or even hospital that has compromised consumers' private information. Knowing how much valuable information is compiled during the mortgage approval process, companies are taking measure to reduce the chances of that happening.

Especially for companies specializing in the tech aspect, securing your information is a major part of the job – and it’s an ongoing process. “When information comes into our solution, we are effectively encrypting everything at rest and in transit,” Bhat says.

Marchetti explains that loanDepot has placed particular focus on keeping hackers from reaching client information, having blocked repeated attempts to access company data. Key to protection is segmentation to avoid a mass download of information, he says, so “if you get access to a piece, you don’t get a whole.”

But the greater level of protection isn’t just for the consumer’s benefit – the automated process itself allows for heightened transparency between the borrower and lender, cutting down on potential for fraudulent information being given to the lender, Marchetti says.

[Read: With Rising Interest Rates, Is Now Still a Good Time to Buy a Home?]

The industry is poised for tech growth. Even with the progress of the last year and a half, the mortgage industry is likely in just the beginning stages of its evolution to catch up with the travel, banking and other tech-transformed industries, Rhodes says.

He points out, in particular, that while employment verification for homebuyers has been automated with Sente Mortgage and other companies, it doesn’t work with all types of employment yet. “The box is still pretty small,” Rhodes says.

But with the ball rolling, it’s only a matter of time before more people qualify for a fully automated process, and the mortgage industry loses its antiquated reputation. But the general practice of shopping around for a mortgage should remain the same – work with the lender to find the right mortgage program for you.

“We’re still in the early days of this. … I think it’s going to be a radical improvement in the process,” Rhodes says.

Homebuyers and other borrowers can reasonably expect for automation in verification of employment and financial history to expand to cover more people as technologies develop and a larger portion of the industry gets on board.

Further behind-the-scenes automation means the loan approval process can be streamlined and made more accurate. Already, Fannie Mae's Automated Property Service uses its extensive information to provide a predicted property value and a confidence score to be used as a factor when considering eligibility for the Home Affordable Modification Program. As more major industry players support a more transparent process, small and large lenders nationwide will be able to automate more as well.

Tags: real estate, housing, mortgages, banking, technology


Devon Thorsby is the Real Estate editor at U.S. News & World Report, where she writes consumer-focused articles about the homebuying and selling process, home improvement, tenant rights and the state of the housing market.

She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.

Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at dthorsby@usnews.com.

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