COVID-19 Changed expectations for digital mortgages

Even with the encouraging news of the vaccine, many ‘stay home and stay safe’ orders are still in place (and most likely will be until later this summer). Businesses have changed the way they provide services and, in turn, buyer and seller expectations for mortgage lending have been modified substantially

While purchases and refinances are still happening, many in person activities such as closings and document deliveries have now moved to online platforms. Although these changes are expected to be temporary, they could signal a shift in how mortgages are handled in the future. 

The last major shift in the mortgage industry occurred in the early 2000s when companies such as Zillow, Truilia and Redifn came into existence. Never before did the general public have access to current listing information such as pricing, school districts, building specs and much more. Before this, a realtor was the only figure that had access to specific information on current listings. This change amounted to a huge shift in public power in real estate. Homeowners no longer had to wait to receive information on a property listing from a real estate agent. 

Around this same time,  lenders started to offer mortgage applications online as well. From this very moment the market shift began to change an expectation was set that future buyers and sellers would be able to handle most of this process online. To this day there are many transaction pieces that must be handled in face-to-face meetings with the industry professionals. Key pieces that have not seen an online shift are open houses, inspections, appraisals, and notarizations. 

COVID-19 spurred an acceleration of innovative processes to enable borrowers to complete a transaction with a remote action. If you haven’t been made aware, virtual home tours now exist. Home buyers have been purchasing homes “site unseen” to combat with the fierce buyers market competition. Also, digital appraisal apps are becoming more fine tuned and they allow homeowners to upload photos and details about their home, then work with an appraiser from a remote location. Finally, e-notary services adapted the ability for remote notarizations through audio-video links, remote online notarization (RON), and other similar technologies. All of these virtual additions to the market allows buyers and sellers to complete essential parts of the purchase transactions without worrying about spreading the virus. 

With the accommodations created by these processes, brokers can easily accommodate the dream of homeownership for many of their future and current clients. In the long run, the more remote and self-serve technologies that are developed, the more they will create an environment for reduced costs and a more efficient mortgage ecosystem. Certainly not all practices adopted during the  COVID crisis will be permanently embraced when the market returns to normalcy, but borrowers will continue to seek the feeling of efficiency, convenience and accessibility.