April 24, 2019
How Technology is Aiming to Bridge the Homeownership Divide
Among workers in the mortgage industry, there is a generally acknowledged divide in homeownership, in which certain sectors of the economy are “underbanked,” especially low-income and disabled individuals, because of the increasingly antiquated format of the traditional mortgage-application process. In light of the 2008 housing crisis, there is a rightfully-instituted structural robustness built into the mortgage-lending process. Lenders want to make good decisions—ones that will protect both themselves and those to whom they loan from risk (since risk to homeowners is risk to the lenders as well). To do so, they look to certain documents to aid them, using workflows with redundancy built in to catch minutiae, errors, and other indicators of high risk. This in turn can result in consumers feeling like they are jumping through hoops of fire just to attain their dream of owning a home. Meanwhile, the technology lenders work with has in the past tended to lean toward inaccessibility, characterized by a lack of complete financial profiles or verified source data. According to a report produced by MReport, some believe the time has come to re-build the technology used to process loans from the ground up, looking to some currently-existing technology as a guidepost.
Certain technological advances, made incrementally, that have made strides into solving some of these problems of accessibility, are rooted in the increasingly digital nature of the application process.
No longer are prospective homebuyers required by some lenders to make numerous in-person business-hour trips to their offices, which, for people whose lives are characterized by a certain inflexibility of schedule (amounting to approximately a full third of the American population), can often be a barrier to entry. Instead, web-based technology is available on their terms, when they have the time to interact with it—making the management of low-income persons’ financial situations more accessible and easier to understand than ever before. And where once the application process was paper-heavy, some lenders have enabled it to be increasingly performed digitally, which speeds up the process and makes it less opaque to the borrower, while nonetheless maintaining a high level of compliance. The collection of data—like credit information, tax forms, pay stubs, and so on—done digitally, is much faster than the old paper-heavy processes of days past. This improves the situation for those borrowers who will be required to provide more information to their lenders, because it results in less likelihood of delay in closing (among other things). And those financial companies providing mobile technology are even more accessible—since low-income individuals are much more likely to engage via low-cost mobile devices than by using high-cost PCs or laptops. Moreover, for those with disabilities, websites are increasingly offering access to amenities like magnification, dictation support and so on.
The idea, some say, is that the entire system should be rebuilt around such advances in access—such that rather than making incremental progress on a lender-by-lender basis, the industry takes technological access as its ground-base, and may build from there in a responsive and forward-looking fashion, ensuring accessibility for all.
But no matter what the financial situation of a buyer, title defects can occur with any property. We at Topouzis & Associates, P.C. are experts at ferreting these defects out and disposing with them in advance of closing. We take pride in the great amount and quality of experience we bring to the closing table in Rhode Island, Massachusetts, and Florida. Contact us if you want a partner in your property closing—one who makes everyone involved feel like family.