Considering that retail financial services is more than a decade into the Internet age, the relative lack of penetration of sophisticated mortgage loan application tools is surprising, though a recent survey by Lieberman Research did find the market for interactive loan applications poised for a breakout.
Lieberman's research found that only 18 percent of surveyed lenders offer "smart" applications, which Lieberman defines as fully transactional, Web-based solutions that guide borrowers through the application, adjusting questions for applicants based on their unique situations. "And 40 percent of the lenders don't offer anything [in terms of online applications,]" says Dan Welbaum, CMO of Mortgagebot, a lending technology firm that sponsored the survey of 251 banks and 79 credit unions (none of which were clients of Mortgagebot).
While most online mortgage applications are still rudimentary and dominated by downloadable PDF applications, the survey suggests lenders recognize the need for upgrades-and know about the available technology.
Banks expect their online application volume will more than triple in the next three years, while credit unions expect a 55 percent increase in the same time frame.
And nearly two thirds of banks and more than three quarters of credit unions are very or somewhat familiar with "smart" lending technology, and 71 percent say they envision a time in the future in which they will need to offer the new tools to borrowers.