If it seems like the headlines are being dominated these days by talk of interest rates, layoffs and uncertainty about the short-term future of the economy (and mortgage market), that’s because they are. But I also think there are some very good things going on right now that merit discussion. This is certainly not a knock on our friends in the media. They’re covering things that people want to know about. However, consider this my effort to shine some light upon the positives that are also emerging every day in the mortgage and real estate industry.

It’s no longer a question of whether to digitize, but rather, what to put in the tech stack?

It really wasn’t all that long ago when it seemed like one could find tumbleweeds in the exhibit halls for some of the great mortgage and proptech conferences. The industry could count on the diehards and evangelists to be there, discussing the future of the “eMortgage” or “end-to-end-solution” with…well, basically other technology fanatics and early (as in super-early) adopters. Finding a lender CEO or even many lender COOs was quite a challenge.

But whether it was the reemergence (however brief) of the potential of a purchase market around 2018; the need for improved and customized technology brought on by the WFH/remote closing spike necessitated in 2020 and 2021; an influx of younger talent who expected, rather than feared, modern technology; general client demand for a better borrowing experience or even just the emergence of more and better available technology, somewhere along the line, the CEOs started showing up at technology conferences (well, at least sometimes) and paying attention to things like tech stacks and production-focused technology.

Now, we still have a long way to go on that front, and while most lenders acknowledge that they need to put more emphasis (and spending) on production and closing technology, there are signs out there (such as the MBA Lender Sentiment survey) that lenders by and large are starting to get that they need to be automated…and now.

The rise of specialized technology 

Let’s not overlook in all of this the rise of specialized technology. There’s definitely a time and a place for global and enterprise level technologies. Some of them do a lot of things very well. Others do some things really well. But very few, if any, do everything extremely well. Let’s face it. There are a lot of mortgage lenders providing a lot of very diverse markets with any number of unique products. And they’re all doing it in their own way. We may occasionally joke as an industry about commoditization, but there’s no way to build a universal, “cradle-to-grave” technology that will serve, say, a private lending company serving Hawaii; a charter bank serving a specific market in the Upper Midwest and an up-and-coming national retailer specializing in HELOCs equally well.

That’s why we’re finally hearing, and lenders are accepting, the need for specialization. It’s why we’re seeing the term “tech stack” everywhere. It’s why silos are really only good for storing grain, and why we don’t want them in our businesses.

An overlooked, but very important, accomplishment

Mortgage lending can be a very specialized business. We can all agree that there are many moving parts. We may also agree that even more change is coming. That’s why even a widespread adoption that no two lenders should have the exact same tech stack is a very good development for even the near-term future. Specialization and connectivity are here to stay.

So while it’s easy to admit that there will definitely be some challenges facing the mortgage industry for the next few months or maybe even years, let’s stop for a moment and celebrate, however briefly, the fact that we’re finally admitting that, as an industry, we’ve already taken a very big step towards adaptation. And that’s no small accomplishment.