It’s pretty hard to avoid the word “innovation” in my line of work. Nobody purposely looks for outdated, old-fashioned, or obsolete technology, right? Innovation is a word that’s right up there with “streamline” and “efficiency” for technology producers writing sales or ad copy.

On innovation in the mortgage industry

But while we tend to confine the word to the bucket of tech, the fact is that innovation is the introduction of something new, be it a way of doing things, a product or even a way of thinking about things. 

I’ve been thinking about innovation a lot lately. When the market slows and order volumes decline, we suddenly have the time we didn’t have when things were busier. It’s a great time to reflect or even rethink things. I’ve written more than a few times about some of the things I’d love for our industry to collectively revisit or rethink: building a better workplace, for example, or a doubling-down on our efforts to improve the DEI culture in mortgage and real estate.

It’s also occurred to me that, while, in some ways, markets like these are manageable for huge businesses, who can simply cut back and hunker down on their reserve resources. They’re also survivable for the tiny start ups (if they have a resource or two or a couple of great clients) with little to no overhead. But it’s the larger small guys, if that makes sense, who bear the biggest risk. They also, in some ways, face the greatest opportunities. 

An opportunity to change the world

It’s the mid-sized firms that have no choice but to be creative when order volumes drop. Necessity really is the mother of invention (or innovation). And we’ve seen businesses rise from the middle of the pack to the top before. Mid-sized lenders embracing new wholesale lending models went from struggling to meet payroll to having their names on professional sports stadiums. LOS technology took some major leaps in many ways during the aftermath of the Great Recession, resulting in some of the most successful technology providers in the space. 

We’ve come a long way in terms of modernizing our industry, but the way we conduct the real estate process is still rife with opportunities to improve. The closing process, much less closing experience, is still more of a cliffhanger than it should be for those who’ve never experienced it before–and even for those who have! 

Chat GPT is ushering us into a new era of AI capability, and that will surely show itself (eventually) throughout the mortgage industry. In fact, in some sectors, it already is.  Who will harness that power best, and where will they aim it? Will they further use it to reduce keystroking and other archaic means of communication or data transfer? Will they use it to supplement or even generate their consumer education, customer support or even loan documentation materials?

Will the industry further embrace the WFH model? In spite of the data suggesting WFH doesn’t just make for happier employees, but facilitates higher productivity levels, some of the most stubborn, old school graduates of Burnout Culture University continue to cling to their outdated notions about management, office culture and employment. Most of them will be gone soon enough. Which businesses in our space will lead the way in changing how mortgage professionals work? 

An invitation to innovate

In fact, will we, as an industry, begin to make more time for our employees to just…think? As automation and efficiency help employees become more efficient, which leaders will harness the collective brain power of their staff and get the most out of the hours reclaimed from manual processes by giving their people the space and encouragement to think and innovate? 

Oftentimes, the best ideas come from people new to an industry, facing our biggest challenges at the ground level every day. Innovation shouldn’t be limited to the corner offices on the top floors. If anything, maybe that’s a big part of the reason our industry has been a little slower to join the rest of the business world in the 21st century.

Yes, it’s been a relatively challenging 2023 thus far. But the best has yet to be seen. It will soon, as the most effective innovators begin to make their mark. And it will be to the collective benefit of the industry.

We at LodeStar are grateful to all of our clients, friends and colleagues who take the time to view Deeper Thoughts. Please consider having a look as well at some of our other great content, including our podcast, “LodeStar’s Lending Leaders,” and “A Tale of Two Mortgages: an original webcomic for the mortgage industry, presented by LodeStar.”  As always, your feedback is welcomed and appreciated!