Applying For A Home Loan From Your Phone - Real or Just Hype?

I was recently quoted in an article by the Los Angeles Times (click here to read article) about the simplified mortgage application process being touted first by Quicken Loans' "Rocket Mortgage" and now by LoanDepot. Do they really have something faster and unique or is it just another way of utilizing the technology that we all have at our fingertips?

I'm going to take a cynical view.  When you break it down, it's really nothing special! I already have the same technology available as a mortgage broker and I believe I can process a loan faster than these two big originators.

How Does It Work?

Perhaps the biggest complaint among borrowers in recent years is the amount of paperwork that it takes to properly process a loan.  Every page of every bank statement, two years of income history including tax returns, W-2's, current paystubs, recent mortgage statements and on and on.  In an effort to streamline the process, reduce the burden on borrowers and, to take advantage of new technology, Fannie Mae has introduced a system whereby the lender, rather than from the borrower, can obtain certain documents directly from banks and employers, bypassing the borrower, with their permission of course.  Many lenders have already updated their internal systems to access this documentation directly from the source.

Does It Work?

Yes, it works for the simple borrower.  I'm talking about borrowers that are employed, salaried and get paid the same with each paycheck.  And there is no significant moving around of their down payment money, no gift funds, etc.  In other words, borrowers with self-employment, multiple sources of down payment funds, etc., probably won't work.

Does It Save Time?

The early feedback says "no".  What I hear from a friend that originates loans at one of the call centers at Loan Depot, it can take a week or two to get the documentation needed from the banks and employers.  But, I can always get what I need from my salaried borrowers in a day or two.  And tech-savvy millennials can get it to me in a minute or two.  Additionally, many borrowers in our California market are more complex with multiple sources of income, self-employed, etc.  I wouldn't leave obtaining and analyzing even slightly complex files to technology and unskilled processors.

Where's The Personal Touch?

I've learned over the 40+ years of experience that the "personal touch" is needed when clients are making probably the biggest purchase of their lives by getting a mortgage.  Explaining the process, explaining why certain documentation is needed and holding their hand throughout the process is important.  If it's a purchase transaction I can't imagine trusting the details to a faceless internet process.