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.

[See: The 25 Best Affordable Places to Live in the U.S. in 2017.]

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.

Recommended Articles

Is there a Better Time to Sell a House?

Dima Williams | Feb. 18, 2020

Winter isn't keeping homebuyers at bay anymore. You may want to consider putting your property on the market before spring hits.

How to Find a Reliable Contractor

Teresa Mears, Devon Thorsby | Feb. 14, 2020

This expert advice will help you find a contractor to get your renovation done right.

Homebuyer Programs for Marylanders

Devon Thorsby | Feb. 12, 2020

These loan, payment assistance and education programs may help you buy a home this year.

6 Tile Trends for Your Home

Lisa Larson | Feb. 12, 2020

These popular tile options can introduce new colors, patterns and textures to your home.

8 DIY Bathroom Remodel Projects

Devon Thorsby | Feb. 7, 2020

These projects can be simple updates or combined for a full DIY bathroom transformation.

The Guide to Living in a Van

Devon Thorsby | Feb. 5, 2020

What you need to know when comparing costs and plans for your dream of living full time in a van.

Are Your HOA Fees Too High?

Wendy Arriz | Feb. 4, 2020

Here's how you should evaluate the monthly fees or carrying costs for a building or neighborhood.

The Best Virtual Room Design Tools

Devon Thorsby | Jan. 31, 2020

Use these tools to create floor plans, 3D models and other details to boost your room design.

What's That Smell in My House?

Devon Thorsby | Jan. 29, 2020

Figure out the likely causes of unpleasant smells in your home.

Why Move to Lower Your Property Taxes?

Steven Gottlieb | Jan. 29, 2020

A rising property tax bill may have you considering moving somewhere new. Consider these three things before making the change.

The Best Free Interior Design Apps

Devon Thorsby | Jan. 27, 2020

These apps help you brainstorm, budget and plan your next renovation or room design.

6 Simple Ideas for Your Home Office

Deanna Haas | Jan. 24, 2020

Here's a list of tips for designing your home office, maximizing productivity and getting more work done while you're working from home.

What You Should Know About Tenant Rights

Devon Thorsby | Jan. 23, 2020

Know what protections you have when you and your landlord get into a dispute.

How to Save on Hardwood Flooring Costs

Geoff Williams | Jan. 22, 2020

Consider these tips and tools to save on expensive hardwood costs.

9 Basement Renovations on a Budget

Devon Thorsby | Jan. 21, 2020

Make your underground space a little more welcoming without going beyond your budget.

What to Know About Moving to California

Devon Thorsby | Jan. 15, 2020

No other state offers such a variety of places to live and job opportunities, but expect to pay more.

Which Home Is the Best Layout for You?

Devon Thorsby | Jan. 10, 2020

Before you buy or build a home, consider how the footprint and floor plan fit with your lifestyle.

Why You Should Sell Your Home in 2020

Devon Thorsby | Jan. 8, 2020

The housing market may not be as hot as in previous years, but selling now could be your best bet.

What to Know Before Renovating a Garage

Deanna Haas | Jan. 6, 2020

A garage renovation can add value to your home – here's what you should keep in mind before starting the project.

Best Interior Design Instagram Accounts

Devon Thorsby | Jan. 3, 2020

These interior design Instagram accounts offer advice, inspiration and resources to elevate your home design.