“Continued mortgage modernization is an important means of solving industry problems. For example, Fannie Mae has already demonstrated that process improvements and data-enabled decision-making can reduce loan defect rates from 6% just a few years ago to under .005%…
…technology is [also] improving the opportunity for lenders to serve borrowers with low to moderate loan amounts. When Dodd-Frank imposed a 3% cap on mortgage-related service fees, the goal was to help consumers. But with today’s razor-thin margins, the rule inadvertently made jumbo loans a much bigger part of the business model for many lenders. By leveraging information closer to the point of origination and streamlining downstream processes through automation and big-data validation, lenders are finally moving the needle on the cost to originate. This, in turn, is freeing lenders to approve more low and medium-balance loans, often commensurate with first-time homebuyers and moderate-income borrowers.”
