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Industry: Mortgage

Top Mortgage Lending Trends in the UK and Europe

Top Mortgage Lending Trends in the UK and Europe: Smarter Decisioning for a Changing Market

Navigating evolving market conditions, affordability challenges, and AI-driven risk management

The UK mortgage market is poised for a notable rebound in the coming year, with mortgage lending growth projected to double compared to 2023, according to EY. While this signals renewed optimism, lenders are still navigating complex challenges — rising interest rates, affordability constraints, evolving regulatory pressures, and shifting borrower expectations.

Across Europe, mortgage markets are experiencing varying levels of volatility. Some countries, like Germany and the Netherlands, are facing demand fluctuations due to interest rate adjustments, while others, such as France and Spain, are seeing pockets of resilience amid broader economic uncertainty.

So, how can lenders capitalize on growth while managing risk? By embracing advanced credit and fraud risk decisioning, leveraging alternative data, and integrating AI-driven automation, mortgage providers can ensure they remain competitive in a rapidly changing landscape. Here’s what you need to know.

1. Mortgage Market Rebound: Will Growth Be Sustainable?

After recent turbulence, the UK mortgage market is showing early signs of recovery. The latest data from EY forecasts that net mortgage lending will grow from £11bn in 2023 to £22bn — a significant shift fueled by economic stabilization and a potential slowdown in interest rate hikes. However, growth comes with some challenges:

  • Interest rates remain high compared to pre-pandemic levels, affecting affordability.
  • Consumer confidence is still fragile, with borrowers cautious about long-term financial commitments.
  • Regulatory scrutiny is increasing, with the Financial Conduct Authority (FCA) pushing for fair lending practices and enhanced risk oversight.
Across Europe, trends vary widely:
  • Germany is experiencing weaker housing demand due to tightening credit conditions.
  • France is navigating a slowdown in new mortgage approvals amid regulatory adjustments.
  • Spain and Portugal are seeing a rise in international buyers, stabilizing demand despite domestic affordability challenges.
What do you need to do? To thrive in this landscape, mortgage providers must improve risk assessment capabilities and adopt more dynamic credit and fraud risk decisioning frameworks that can adjust to market shifts in real time.
2. The Affordability Dilemma: Why Traditional Credit Scoring Isn’t Enough
Affordability remains one of the biggest challenges in the UK mortgage market. While lending volumes are set to increase, many borrowers are still struggling with:
  • High living costs and wage stagnation, which impact disposable income.
  • Stringent mortgage stress tests, making it harder for first-time buyers to qualify.
  • Variable rate mortgages, which are exposing homeowners to fluctuating monthly payments.
Traditional credit scoring models (which are heavily reliant on credit history and debt-to-income ratios) often fail to provide a full picture of a borrower’s financial health. That’s why leading lenders are increasingly turning to alternative data like the following to refine their risk assessments:
  • Open banking data: Real-time income and spending patterns can help assess affordability more accurately.
  • Rental payment history: Demonstrates financial discipline, especially for first-time buyers.
  • Utility and telecom payments: Provides additional insights into payment behaviors and financial stability.

By integrating AI-powered risk decisioning, you can analyze alternative data at scale, leading to more inclusive lending decisions and better default risk prediction.

What do you need to do? Move beyond traditional credit scores by adopting AI-driven analytics and alternative data sources to expand lending opportunities without increasing risk.

3. AI and Automation: The Future of Mortgage Decisioning

With mortgage competition increasing and regulatory expectations rising, you can no longer afford slow, manual credit decisioning processes. AI and automation are becoming essential tools for enhancing speed, accuracy, and compliance.

AI is transforming mortgage lending with:

  • Instant Decisioning – AI models process vast amounts of data in real time, reducing approval times from weeks to minutes.
  • Advanced Fraud Detection – AI-powered anomaly detection helps identify fraudulent applications before loans are approved.
  • Improved Regulatory Compliance – AI ensures fair lending practices by providing explainable decisioning frameworks and reducing bias.

But what’s the competitive advantage to AI Decisioning?

  • Higher Approval Rates: More borrowers qualify for mortgages through personalized risk assessment.
  • Reduced Risk Exposure: Predictive analytics detect high-risk applicants before issues arise.
  • Operational Efficiency: Automating credit checks and underwriting reduces costs and processing times.
What do you need to do? Future-proof your mortgage operations by implementing AI-driven decisioning platforms that enhance efficiency while maintaining compliance with FCA and EU regulatory guidelines.
Building a Smarter Mortgage Lending Strategy

With UK mortgage lending growth set to double and European markets shifting, mortgage providers must evolve their decisioning strategies to remain competitive.

By embracing AI, alternative data, and automated decisioning, you can:

  • Expand access to credit while minimizing default risk.
  • Deliver faster, more seamless customer experiences.
  • Ensure compliance with evolving regulatory standards.

As the mortgage landscape continues to change, the lenders that invest in innovation today will be the market leaders of tomorrow.

Ready to future-proof your mortgage lending strategy? Discover how AI-driven decisioning can help you boost approvals, manage risk, and streamline compliance.

Shape the future of your mortgage strategy with AI.

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BLOG: Unlocking Success in Poland’s Lending Revolution

Thriving Through Change: Unlocking Success in Poland’s Lending Revolution

Adapting to Rising Rates, Evolving Borrower Needs, and the Power of Technology in a Dynamic Market
  • Mark Collingwood
    Vice President, Sales

Poland’s economic landscape is undergoing significant change, with rising inflation and interest rates (as of December 2024, the annual inflation rate increased from 4.7% to 4.8% the month before, indicating persistent inflationary pressures). Likewise, mortgage interest rates are also on the rise, with the average rate in the country reaching 7.16% in late 2024, up from just 2.27% in December of 2022. While this economic shift presents both challenges and opportunities for lenders in Poland, one thing is clear – to navigate this evolving environment successfully, financial services providers must look to innovative and agile approaches that address changing borrower needs while still effectively mitigating risk. In this blog, we’re looking more closely at this shift, and how you can ensure your business thrives amidst uncertainty.

The Impact of Economic Shifts on Lending in Poland

There’s notable turbulence in Poland’s economy, driven by persistently high inflation and elevated interest rates. At the end of last year, inflation remained high, impacting consumer purchasing power and financial stability. And mortgage rates, which have exceeded 7% for many borrowers, adds further strain to household budgets, making lending challenging for both consumers and lenders. With rising costs like this, potential homebuyers are forced to reassess affordability, which then has the domino effect of slowing down the mortgage market and reshaping the overall lending landscape.

On top of economic pressures, the regulatory environment in Poland is tightening its grip to ensure financial stability. The Polish Financial Supervision Authority (KNF) plays a pivotal role, introducing policies to strengthen risk management and promote financial resilience. Some of these initiatives include enhanced creditworthiness assessments and stricter compliance measures, with the aim to mitigate systemic risks while encouraging responsible lending practices.

But these regulations can present operational challenges for lenders. Balancing regulatory compliance with providing accessible, competitive loan products can be tricky – highlighting the importance of both efficiency and innovation in navigating lending in complex economic situations. Collaboration with regulatory bodies, paired with strategic investments in decisioning technology, will be essential for lenders who want to future-proof their lending strategy.

Evolving Borrower Dynamics: Embracing Flexibility and Digital Innovation to Stay Competitive

Borrowers in Poland are increasingly seeking alternative financing solutions that provide greater flexibility and personalization. Traditional, rigid lending structures are out. Instead, driven by consumers’ desire for financial products that align with their own unique needs and circumstances, budget-conscious borrowers are now prioritizing loan options that offer more adaptable terms and personalized services. To meet these shifting demands, you have to embrace the opportunity to develop and offer:

  • Flexible Loan Products: Options like adjustable-rate mortgages and payment holidays help borrowers seeking more adaptable repayment plans.
  • Personalized Financial Solutions: Tailor loan offerings to individual borrower profiles to enhance customer satisfaction and loyalty.
  • Digital Accessibility and User-Friendly Platforms: Invest in intuitive digital platforms, keeping in mind the implementation of the European Accessibility Act (EAA), which mandates accessibility requirements for products and services (including digital interfaces).

How do you accomplish this? By leveraging advanced technologies, especially artificial intelligence (AI) and machine learning (ML), to transform your credit assessment and fraud detection processes.

AI-driven systems can process vast amounts of financial data in real time, utilizing advanced ML algorithms to identify patterns and anomalies that indicate a borrower’s potential credit risk. Predictive models can analyze spending behavior, transaction history, and even social media data, enabling more accurate credit risk assessments – and more informed lending decisions.
And when it comes to that ever-present thorn in the side of lenders everywhere, fraud, AI/ML offers critical help. Analyzing extensive datasets quickly allows these systems to detect unusual patterns and behaviours that can signal fraudulent activity, allowing for prompt intervention. Fraud detection strategies that incorporate AI have even been shown to improve accuracy in distinguishing between human errors and genuine fraud attempts, reducing unnecessary interventions and false alarms (and saving you time and people-power in the process).

Using advanced technologies like AI/ML is helping to drive digital transformation in lending, and allows for more customer-centric processes:

  • Adoption Rates: Poland is leading central Europe’s digital transformation, with many financial institutions having invested in digital transformation initiatives, recognizing the importance of digital transformation and reflecting a commitment to modernizing operations and enhancing service delivery.
  • Rise of Digital Banking: Digital banking has become the primary channel for financial transactions for many Poles. In 2024, online banking penetration in Poland reached 65%.
  • Successful Digital Lending Initiatives: Poland has witnessed the emergence of innovative digital lending platforms that streamline the borrowing process. For instance, the mobile payment system BLIK allows users to make instant payments and withdraw cash using their standard mobile banking app, enhancing the efficiency and convenience of financial transactions.
  • Streamlining Loan Applications and Approvals: The adoption of AI and digital platforms has revolutionized the loan application process. Automated systems enable quicker approvals by efficiently analyzing applicant data, reducing the time from application to disbursement.
  • Building Trust and Engagement: User-friendly digital platforms enhance customer experience, fostering trust and engagement. Features like personalized dashboards, real-time notifications, and responsive customer service contribute to higher customer satisfaction and loyalty.

Embracing strategies like these will allow you to position yourselves more competitively – all while you enhance operational efficiency, improve risk management, and deliver superior customer experiences.

Riding the Risk Wave: Smart Strategies for Lending Success in Poland

The strain that high inflation and interest rates places on borrowers increases the risk of loan defaults, whether those loans are mortgages or otherwise. When things are shifting, reactive strategies are no longer sufficient. But adopting a more proactive risk management approach, powered by advanced technologies and strategic partnerships, can help you get (and stay) ahead of these pressures:

  • Strengthen Borrower Assessments

    Enhance underwriting processes by integrating AI-driven tools that evaluate real-time borrower data for more accurate risk profiling.
  • Offer Flexible Repayment Options

    Payment holidays or loan restructuring options can support borrowers facing temporary financial challenges, helping to prevent defaults.
  • Adopt Early Warning Systems

    Proactive monitoring of repayment behaviors can flag potential issues early, allowing for timely interventions and tailored borrower support.
  • Real-Time Analytics and Predictive Modelling

    Tools like Provenir’s AI Decisioning platform empower lenders with the ability to analyze data streams in real-time, identify emerging risks, and predict future trends. This enables precise adjustments to lending strategies before problems escalate.

  • Balance Growth with Risk Mitigation

    Sustainable growth requires a dual focus on expanding lending portfolios while maintaining robust risk controls. Leveraging predictive analytics ensures lenders can scale responsibly without exposing themselves to unnecessary risks.

  • Partner With Technology Providers

    Partnerships with tech companies drive innovation, offering solutions for automating credit assessments, fraud detection, and compliance processes.
  • Regulatory Collaboration

    Working with regulatory bodies, such as the Polish Financial Supervision Authority (KNF), ensures compliance with evolving rules and builds trust with stakeholders.
Managing risk in Poland’s uncertain lending environment requires lenders to stay ahead of challenges through innovation, collaboration, and proactive strategies. By leveraging real-time analytics, fostering partnerships, and aligning with regulatory frameworks, lenders can strike the delicate balance between growth and risk mitigation, ensuring long-term success in an ever-changing market.

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KNF Initiatives

The KNF is spearheading efforts to enhance Poland’s financial infrastructure, ensuring the industry can adapt to current challenges:

  • Digital Infrastructure Improvements: Investments in digital infrastructure, including secure data-sharing platforms, streamline operations and improve resilience.
  • Data-Sharing Frameworks: By encouraging transparency and collaboration among financial institutions, KNF initiatives reduce risks while fostering a culture of shared accountability.

Rising to the Occasion: Lending Strategies for Poland’s Future

There is a lot of positivity on the horizon for Poland – the outlook for 2025 is strong, with the Organisation for Economic Co-operation and Development (OECD) projecting a GDP growth rate of 2.4%. This expansion will help invigorate the lending market, and the country’s digital economy is already on a rapid ascent, thanks to the widespread adoption of e-commerce, mobile payments, and online banking tech. The digital economy is predicted to reach $87 billion this year, and over $130 billion by 2030. With a tech-savvy population that is increasingly looking for innovative financial solutions, the runway of opportunity for lenders that adapt to these preferences is long and healthy.

To fully take advantage of what digital transformation in Poland has to offer, consider these strategies:

  • Stay Agile in Adapting to Economic and Regulatory Changes:
    The dynamic nature of Poland’s economy and regulatory environment means you need to remain flexible and responsive. Implementing adaptive business models and staying informed about policy shifts are crucial for sustained success.
  • Leverage Technology to Prioritize Customer Needs and Experiences:
    Embracing digital tools can enhance customer interactions and streamline operations. For instance, the rise of neobanking in Poland is projected to grow by 10.86% between 2025 and 2028, reaching a market volume of $35.82 billion by 2028.
    This trend underscores the importance of digital accessibility and user-friendly platforms in meeting customer expectations.
  • Develop Sustainable, Customer-Focused Lending Practices:
    Offering personalized financial products that cater to individual borrower profiles can foster customer loyalty and drive growth. Flexible loan options and transparent communication are key components of a customer-centric approach.

Poland’s lending market presents a challenging yet promising landscape. Lenders who embrace digital transformation, proactively manage risk, and prioritize borrower-centric innovation will not only navigate economic uncertainties but also seize opportunities for growth. One of the best measures of future-proofing success? The right technology partner.

Provenir’s AI Decisioning platform is uniquely positioned to empower lenders in Poland to thrive in this dynamic environment. By harnessing the power of AI and machine learning, our platform enhances fraud detection, streamlines credit risk assessment, and delivers real-time insights to help you make faster, more informed decisions.

Discover how our AI decisioning platform can help you drive operational efficiency, mitigate risk, and foster stronger customer relationships.

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News: Target Group partners with Provenir to supercharge Mortgage Hub platform

Target Group partners with Provenir to supercharge Mortgage Hub platform

Data-driven decision making enables Mortgage Hub to reduce the time between application and offer, providing a decision in principle in just 20 seconds

Target Group has partnered with Provenir, a global leader in risk decisioning software, to help power its state-of-the-art mortgage originations platform, Mortgage Hub.

The partnership brings Provenir’s award-winning holistic decisioning platform to Mortgage Hub, providing automated end-to-end decision-making throughout the customer lifecycle. Whether it’s applying for a mortgage or customer management, fraud and collections, Provenir’s intelligent decisioning will help power the customer’s journey throughout Mortgage Hub.

The aim is to support the risk strategy of lenders using the Mortgage Hub platform and enable them to make informed decisions quickly and easily. The result is a much faster and more seamless experience for customers and brokers too, with Provenir’s intelligence helping to drive decision-making in every interaction.

Integrating Provenir’s award-winning platform is the latest example of Mortgage Hub helping to innovate (or transform) the originations process. The modular Mortgage Hub platform uses behavioural science and ongoing consultation with all key parties to help mitigate the key frustrations faced during the mortgage process and deliver an improved experience for all.

With the help of data-driven decision making, Mortgage Hub reduces the time between application and offer, providing a decision in principle (DIP) in just 20 seconds.

“In today’s climate, it has never been so important for lenders to be able to make informed decisions, and for the good of the entire mortgage process, to make those decisions quickly. Having Provenir behind the scenes of Mortgage Hub to help power decision making certainly helps to achieve this, all the while improving the experience for customers, brokers and all parties in the mortgage journey.

It is great to partner with Provenir for Mortgage Hub, given that we are aligned in our ambitions to facilitate digital transformation among financial institutions. With its clear capabilities and end-to-end approach, the Provenir platform supercharges our state-of-the-art Mortgage Hub platform.”

Melanie Spencer, sales and growth lead at Target Group

“Provenir is very proud to partner with Target and Mortgage Hub, supporting the continued digitalisation of the mortgage process with intelligent decisioning. This integration allows institutions to power decisioning innovation across the full customer lifecycle for operational efficiency and improved customer experience. This is a shared ethos between Provenir and Target, and the driving force behind both our platforms.” ”

Mark Collingwood, Vice President Sales at Provenir

For further information about Target Group, please visit www.targetgroup.com.

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News: Thriving Through the Mortgage Squeeze

Thriving Through the Mortgage Squeeze:
How Lenders Can Conquer Delinquencies, Fraud, and Falling Credit Demand

With rising mortgage renewal rates on tap for 2025, Canadian homeowners will be feeling the squeeze – and lenders are bracing for the fallout. Increased delinquencies, financial strain, and potential fraud are all on the horizon, unless lenders adopt advanced fraud detection systems that leverage AI and real-time analytics. Check out the article for Canadian Finance News, written by Cheryl Woodburn, Provenir’s Country Manager of Canada, for more insights.

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Top Three Mortgage Lending Trends: How to Make Smarter Credit Decisions Today to Thrive Tomorrow

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Top Three Mortgage Lending Trends:
How to Make Smarter Credit Decisions Today to Thrive Tomorrow

From HELOC to HELOAN, the global mortgage lending market is vast – it reached almost $11.5 billion in 2021 and – despite economic slowdowns – is estimated to grow at a CAGR of 9.5% through 2031, reaching a mammoth size of $27.5 billion. 

However, the last few years have brought the mortgage industry face-to-face with an unprecedented challenge – to digitize core functions almost overnight to tackle record levels of origination and forbearance activities. Many lenders had to expedite tech projects to provide the necessary infrastructure needed to support these new practices and accelerated digital solutions to create better customer experiences and reduce operational costs.

While the industry has found success in adopting new digital solutions, the UK still faces a housing affordability crisis, leaving consumers even more reliant on credit for mortgage originations, refinancing, and regular payments. Though there are attempts to combat the lack of affordable mortgages, like this initiative from Skipton Building Society, rates continue to rise.

Amidst these economic challenges, however, innovation and technological advancements in the industry provide opportunities for companies to adapt and succeed in this challenging environment. From better customer experiences to more accurate credit risk decisions and more financial inclusion, the industry is evolving. 

Discover the top three mortgage lending trends that can help you make smarter credit decisions today to thrive tomorrow.

Trend 1: Increased Use of Automation

Mortgage lending can be tedious for both lenders and applicants at the best of times, due to lengthy, complex processes with multiple stages. While mortgage transactions can take between six to eight weeks to close on average, consumers believe they should take no more than three. That’s why automation is a trend with wind in its sails: decisioning automation can help lenders meet borrower expectations. 

Why it’s popular

Instead of having to wait months for a mortgage, decisioning automation allows lenders to approve customers in a fraction of the time. Even the most complex processes are streamlined, saving time (and brain power) across the board. Customers benefit from approval periods that align with their expectations, while lenders expedite their workload to produce more accurate decisions, faster – freeing up resources to attract and retain customers while boosting sales volume. 

How to use it

While automation may seem intimidating to actually use, finding the right decisioning automation tech is often the biggest hurdle. Take control with flexible technology that offers drag-and-drop UI, letting you configure and reconfigure automations to reflect your changing needs, eliminating reliance on vendors and dev teams. With optimized data and integrated workflows that can layer on top of existing tech and talk to a variety of systems, automated decisioning can be as simple as clicking a few buttons.

Trend 2: Data-Driven Risk Decisioning

Credit risk decisioning is an essential element of mortgage lending, ensuring that lenders are mitigating fraud and default risk and borrowers are getting the right loan terms. For long term loans like mortgages, accuracy is essential to mitigate risk and provide competitive offers to consumers. And an increasing number of mortgage lenders are using data-driven risk decisioning to do both.

Why it’s popular

Mortgage lenders no longer have to accept uncertainty – whether it be in economic conditions or customer behavior. Accessing real-time data ensures more accurate creditworthiness assessment and lower risk for the lender. It can also help businesses grow by providing the insights needed to hyperpersonalize offers for both new and existing customers, improving competitive advantage. On-demand data can also help flag if risk profiles change, allowing lenders to step in long before missed payments or home repossession.

How to use it

The ideal way to harness data-driven risk decisioning for your mortgage lending business is to invest in a data and decisioning ecosystem in which the decisioning engine pulls real-time data on demand from a variety of data sources through a single API. The streamlined, integrated tech stack helps you better understand consumer needs across the entire customer lifecycle. Add in machine learning for evolving customer insights that will eliminate the guessing game and let you make smarter credit risk decisions.

Trend 3: Alternative Credit Scoring Models

Financial inclusion has been gaining traction in the fintech world for years, but recent global economic and political overhauls permanently changed the way we think about access to financial services. Alternative data is a central feature enabling financial inclusion initiatives for lenders across the world. No wonder 65% of credit risk/lending decision makers use alternative credit data on at least half of their credit applications. And that number is only growing, helping lenders accelerate financial inclusion by enabling the creation of alternative credit scoring models, eliminating reliance on traditional credit bureau data alone.

Why it’s popular

Traditional credit scores don’t tell the whole story, especially when it comes to thin or no-file consumers – and 71% of credit providers agree. Alternative data lets lenders access a variety of data that doesn’t come from credit bureaus, including utility payment history, employment data, geographical data, and rent payment history – data that would be especially relevant to establish creditworthiness for a new homebuyer. Mortgage lenders who use alternative data to build alternative credit scoring models can expand their customer bases without increasing risk and support financial inclusion at the same time.

How to use it

In order to build alternative credit scoring models, you need decisioning tech integrated with alternative data. The most powerful data and decisioning platforms simplify the data supply chain, pulling in the relevant data exactly when you need it to ensure more accurate decisions for every application. And don’t compromise on risk – create processes that pull in more alternative data for thin file applicants and less or none for traditionally creditworthy applicants. 

These Trends are Here to Stay

Mortgage lending is often a long, complex process that puts a strain on both lenders and borrowers. The trends we explored today help alleviate that strain, and that’s why they’re here to stay. 

From automation that improves processing speed and customer experience to data-driven risk decisioning that improves risk assessment accuracy and competitive edge through personalized offers to alternative scoring models that help lenders grow their business and accelerate financial inclusion of the under or unbanked, these trends represent the future of the industry.

Want to take these trends and run with them? Make sure your mortgage lending business is ready with our eBook, The Secret to Consumer Lending Success. Download it today!

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The Future of Mortgage Origination is not About Mortgages Anymore

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The Future of Mortgage Origination
is not About Mortgages Anymore

Consider this scenario.

Sam has to pick up some checks from a client, but his car is in the shop. So, Sam takes an Uber to the client’s office, gets the checks, scans the checks into a business account using his iPhone, takes another Uber (making a dinner reservation through OpenTable while inside Uber), arrives at the restaurant, sits down to eat, and answers a LinkedIn message while he waits for his food.

Now reverse your clock 15 years.

Absolutely nothing in that story short of “sitting down in a restaurant” or “picking up paper checks from a client” would have been possible.

One of the biggest impacts of technological growth over the past two or three decades is the rise of the “on-demand economy,” which many people seem to believe is only geared towards the young, with their millennial mindset, skinny jeans, and SnapChat filters. In reality, the on-demand economy is growing for all age subsets, which makes perfect sense. If a person is hungry, has a smartphone, and wants food quicker, don’t you think they’d learn to adapt to the current systems?

Real estate disruption, on the other hand, is slow going. While regulations and infrastructure slow the rate of change, many argue it’s coming faster than we think. Some of the major areas being disrupted by Fintech startups are appraisal processes, subletting, and the chance to flip a home.

But now think about mortgages. In many ways, the mortgage defines the American dream — most people don’t have the outright cash to buy their family’s dream home — and because of or in spite of that, it’s one of the more tedious, painstaking processes out there. Talk to 100 people about their mortgage process; chances are, less than 10 were entirely happy with it. Rather, you will hear words like “stressful” or “painful”. Even with great banks and reps, the mortgage approval process can be time-consuming and overwhelming.

That’s poised to change, though.

Rocket Mortgage, now part of Quicken, was one of the first into this space. The seismic shift in mortgages is that an industry dominated for decades by box-checking processes and numbers is now being questioned by concepts like “UX” (User Experience) and rapid response, i.e. the on-demand economy.

The theory works like this: if you can get a car or a pizza in five minutes, why can’t you have an idea of where your mortgage will stand in the same period? “On-demand” has to apply universally, and more generations — not just millennials — believe that now.

How do mortgage origination software process applications so quickly?

Good mortgage origination software integrates with the TransUnion, FICO and other bureaus — then pulls data from public records, bank accounts, and social media profiles, among others, to deliver an initial mortgage context in seconds. In the same way that our Sam’s story wasn’t possible 15 years ago, nor was this. You’d probably wait at least a few hours, if not a week before someone gave you possibilities about your mortgage.

With this progress comes the “UX” mentioned above. Mobile got to scale very quickly — there are more smartphones on Earth than people — and as a result, much UX is mobile-first these days. When you’re on mobile, you’re quite literally on the go. You want a quick, easy, intuitive experience where you don’t need to pull a lot of data from other apps or screens. That ‘now’ mindset carries over regardless of device.

This — this process of designing the simplest, “I will stick with this until the end” method possible — is now how mortgage companies must think of their business. It’s not about 1991 metrics anymore. It’s about how you design the experience for the home buyer, whether they can access it quickly and easily, and what value-add you provide around that (helpful tips to guide them through the home buying process, for example).

Technology has changed everything — even the mortgage underwriting process. So, as a lender, you must realize that the business you’re in now isn’t the same one it has been for generations. Now it’s about experience and speed.

Is Your Digital Mortgage Experience Falling Behind?

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Magic 8 Ball Answers Question: How will Rising Interest Rates Impact the Commercial Real Estate Finance Market?

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Magic 8 Ball Answers Question:
How will Rising Interest Rates Impact the Commercial Real Estate Finance Market?

Many people are familiar with the classic Magic 8 Ball toy that told your fortune or could provide positive, neutral or negative advice on a particular topic.  Having your future predicted was as simple as asking a question and then turning the ball over to read the answer.  If you didn’t like the answer provided (there were only 20 possible answers after all), you could shake or shock the Magic 8 Ball into hopefully providing a more positive outlook.  If only we could use the Magic 8 Ball to predict how the Commercial Real Estate Finance (CREF) market will respond if the Federal Reserve continues to raise interest rates.

Magic 8 Ball answers:  Concentrate and ask again.

The recent Commercial Real Estate Finance (CREF) Outlook Survey conducted by the Mortgage Bankers Association (MBA) validates that commercial lenders anticipate the demand for new commercial and multifamily mortgages will remain strong in 2016.  On the origination side of the lending coin, MBA anticipates growth in 2016 to reach the to $511 billion mark.

Magic 8 Ball answers:  Outlook good.

Overall, the CREF market performed well in 2015 aided by lower interest rates and higher rates of return on commercial real estate. The economy has grown healthier and inflation has been lower.  But with the Federal Reserve’s recent interest rate hike in December 2015 after almost a decade, and the possibility of more hikes to come, will the remainder of 2016 remain as rosy for commercial real estate lending?

Magic 8 Ball answers:  Ask again later.

At the recent MBA CREF/Multifamily Housing Convention & Expo 2016 held last month, MBA experts predicted that the Federal Reserve will in fact raise rates further in 2016 and possibly into 2017.  When rates will rise and by what percentage is not something the Magic 8 Ball can tell us unfortunately.

Magic 8 Ball answers:  Cannot predict now.

Higher interest rates could impact lender cash flows and threaten to devalue assets.  A spike in rates could have a ripple effect for borrowers, increasing commercial mortgage loan rates therefore threatening to shrink the scope of commercial and multifamily property inventory available within budget.   The appetite for new development projects and commercial loan requests may also decline as a result.

Magic 8 Ball answers: Outlook not so good.

Many lending institutions are already suffering from a high degree of manual processing that restricts their ability to respond to market movement and scale up their commercial real estate and mortgage origination business.  Lack of an integrated technology also limits the transparency delivered by unified, automated and flexible financial analysis and risk rating.  Magic 8 Ball answers: Reply hazy try again.

Commercial real estate lenders operating on a single, scalable origination platform today are better prepared to respond to market changes more quickly and efficiently tomorrow.   Savvy lenders with the heightened surveillance capabilities and sound data processing across complex commercial loan origination and multi-asset portfolio management however will be able to predict their own future more accurately than the Magic 8 Ball ever could.

Magic 8 Ball answers:  Signs point to yes.

Is your institution prepared to navigate potential interest rate hikes or will you find yourself looking to the proverbial Magic 8 Ball for answers?

Magic 8 Ball answers:  Don’t limit your lending business growth.


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Living in the Mortgage Underwriting Process

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Living in the Mortgage Underwriting Process

  • Matthew Wilde

I have been selling risk analytics and decisioning solutions for years now. I know the value proposition, and fully believe in it, because I speak with financial institutions who share their mortgage-related challenges with me every day. These are incredibly smart people that I get to speak with, innovating in their organisations to make decisioning and underwriting processes more precise, more intelligent, and progressively faster. What I didn’t know, until now, is how difficult it is to live through the mortgage origination process from the customer’s shoes. Since I’ve recently lived it, I have to share my story to corroborate the pain that all of my prospects are sharing — now from a slightly different perspective.

Mortgage in Principle: My Experience

Very recently, I worked with a mortgage broker to kick off the mortgage pre-approval process. My information was submitted to over ninety financial institutions. Now, with a particular interest in this business I was curious to see how communication would be handled and what the response times would be. After all, I’m speaking with these organisations every day and they are all telling me that they are bent on making this exact process more customer-centric, simpler, faster. The first mortgage in principle came back within fifteen minutes, and the remainder trickled in over the following forty-eight hours.

This is the part of the story where emotion plays its part. That is to say, when I was waiting for the pre-approvals to come in there was a new, unfamiliar part of my brain that jumped in the co-pilot seat. My logical brain went along its daily business while our new co-pilot counted through the list of things that were going to go wrong, and how that would rob us of all our hopes and dreams. That co-pilot made forty-eight hours feel like weeks, and was a huge advocate for that first pre-approval. ‘Fifteen minutes! They must really have their operation together; their customer service is going to be fantastic. If those other guys take twenty-four hours for pre-approval, I don’t even want to know what the underwriting process is going to be like.’ I suspect I’m not an anomaly here.

Also, read: Credit Underwriting Process

Receiving a decision in principle is only one step in the process – albeit, often the simplest – and I know my ‘after it’s all said and done’ recap is not going to be 100% sunshine and rainbows, nor should it be. Small doses of fear sharpen our senses in times when outcomes are heavy, and our decisions have consequence. Home buying is a big deal, and borrowing hundreds of thousands of pounds to spend on a house is not supposed to be as light-hearted as ordering a take-out. But, why shouldn’t it be as positive?

Mortgages: Heading in the Right Direction

I have my hopes high for the remainder of the process. After all, I’ve seen first-hand the positive steps that financial institutions are taking toward better, more customer-centric lending processes. Some are a bit slower than others (I know we’re not ordering take-out, but if you’re twenty-four hours behind your competitors, we have some work to do). I’m happy to be part of the solution, and look forward to sharing part two of this story so we can continue improving together.

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The Future of Mortgages: Has COVID-19 Signaled the end for Traditional Mortgage Lending?

ON-DEMAND WEBINAR

The Future of Mortgages:
Has Covid-19 signaled the end for traditional mortgage lending?

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While the world huddled down, slowed down, and tried to adapt to life amidst a global pandemic, mortgage lenders were facing a unique problem: they couldn’t keep up with demand.

Mortgage interest rates, while volatile, hit all time lows, driving huge increases in application volume for both new mortgages and refinance loans. At the same time, economic uncertainty made managing credit risk increasingly challenging, especially with a newly remote workforce still finding its feet.

In a document heavy industry, reliant on in-person meetings, lenders were tasked with finding alternative ways to keep loans moving through the decisioning process. So, what does this mean for the industry as customers emerge from isolation?

In the on-demand event, our panelists discussed:

  • Customer Experience – how can we simplify and adapt mortgages to new consumer expectations?
  • Credit Risk vs. Risk Appetite – how can lenders keep approvals flowing when approval criteria gets tighter?
  • Lessons Learned – what lessons can we learn from enforced lockdown and increased risk to drive a mortgage revolution?

Watch the recording to see if lenders will take this opportunity to revolutionize mortgage lending.

Speakers:

  • Sapan Bafna

    VP, Advanced Delivery Enginges

  • Daryl R. Grant

    Managing Director, Digital Lending Solutions

  • Gabriela Villafranco

    Mortgage Loan Originator

  • Fowler Williams

    President and CEO, Crescent Mortgage Company


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