Mortgage Technology Creates Product Choice

Mortgage Banking, May 2007 | Go to article overview
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Mortgage Technology Creates Product Choice


Expect the mortgage lending space to be much more risk-averse throughout the next year as the correction among subprime lenders shakes out in the industry. But even in the currently challenging environment for lenders, borrowers have more product choice than ever thanks to technology, according to Doug Duncan, the Mortgage Bankers Association's (MBA's) chief economist and senior vice president.

Duncan told attendees at MBA's National Technology in Mortgage Banking Conference & Expo in Tampa, Florida, in March that part of why there's been so much growth in the subprime mortgage space is due to the collaboration between technology vendors and lenders working to improve the efficiency of the mortgage process. It's paid off in more ways than one.

"For twenty-something years, you've been driving down the cost of taking out a mortgage," said Duncan. "Consumers, being intelligent, have said, 'If you're going to make it cheaper and if you're going to give the option of pre-paying, I may as well take advantage of that'--and they've been doing that."

As a result, consumer behavior has changed due to technology-driven product availability, and with borrowers less likely to opt for a 30-year, fixed-rate loan when they know they'll be moving well before that time.

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