Future of Mortgage Lending Report

During an unprecedented period of record growth, the mortgage industry, for the most part, has produced satisfied consumers. But mortgage lenders face headwinds as business returns to more normal levels of activity similar to what they were before the coronavirus pandemic and profit margins decrease. Lenders are competing for a smaller pool of customers and borrowers are coming in expecting a faster, more automated experience. At the same time, the value of personal customer relationships has not lost its importance.

Some of these expectations are not new, though. The groundwork was already being laid for an end-to-end digital mortgage experience, as fintechs have been busy developing tools toward that goal for years. COVID-19 accelerated some of these digital trends and underscored the need for more technological innovation.

While the majority of consumers are relatively satisfied with the mortgage experience, borrowers are still encountering speed bumps that need to be removed for the industry to fully meet client expectations. Younger consumers, including those who will be the industry’s primary clients in the coming years, are entering the market with a distinct set of needs that differ from those of their elders. Improved speed and efficiency, as well as enhanced methods of education and communication to would-be homeowners, will go a long way toward increasing satisfaction.

The mortgage industry is undergoing a period of normalization and recalibrating expectations following an exceptional and somewhat unexpected period of growth in 2020 and 2021. The conditions that brought mortgage lenders to great profitability were unique, however, and highly unlikely to occur again. As volumes come down to earth and interest rates rise, lenders need to better understand their consumers to remain competitive. National Mortgage News' Spencer Lee recently conducted an extensive research paper entitled Future of Mortgage Lending 2022 where he looked at changes in borrow expectations. Our Matthew Moosariparambil shared his insights and validating the report's data points.

This report was conducted by Arizent and National Mortgage News to better understand how consumer perceptions and expectations will affect the future of mortgage lending.

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