TECHNOLOGY FOR THE MORTGAGE INDUSTRY

Mortgage brokers are increasingly becoming important players in the mortgage industry value network.  In 2001,  38% of first time buyers in Canada used a mortgage broker,  up from only 18% in 1999.   This is significant as two out of three mortgage renewals are secured through the original lending institution.  This indicates mortgage brokers are winning more business but they must manage their relationship with their customer appropriately to maintain that business.

The increase over the last few years of first time buyers (clients purchasing their first home)  and their increased use of mortgage brokers as their agent has meant an increase in the number of mortgage brokers offering services and an increase in tools available to them and to the industry to facilitate mortgage processes and requirements.

Craig Focardi,  a senior analyst with TowerGroup (a US research firm) has found that Canadian mortgage lenders and brokers are more aggressive adopters of new software technologies than their American counterparts.   He attributes this to the fact that most mortgage brokers have entered the business in the last five years and don't have legacy systems to upgrade so they are able to adopt newer technologies and software standards. ¹

Christine Barry, an analyst with the research firm Celent and author of "Mortgage Technologies: Paving a Path to Full Automation"  expects that over the next two years over half of the top 100 mortgage originators in the US will deploy new loan origination systems. She expects spending on loan origination systems to exceed $200 million over that period,  not including licensing and service contract fees.²

Barry points to the US "Do Not Call" registry and regulation as the reason for this spending as originators rely on telemarketing to generate much of their business.  As the regulation will severely impair that portion of new business generation they will be looking to reduce costs and find new means of generating business.²

If Canada follows suit with similar legislation,  brokers will be looking for similar solutions.

Currently mortgage brokers use contact management tools in order to generate leads and find new customers in their sales and marketing efforts.

The mortgage origination process in Ontario is dominated by products by Basis100 and Filogix.  This process includes gathering of appropriate documentation,  sourcing of funds with a  lender and completion of all paperwork.

When the lender is a private investor the broker may also administer the ongoing service of the mortgage including following up on default,  foreclosing, and legal proceedings.

Finally all documents in a mortgage file are required to be kept for at least seven years from the date of maturity of the mortgage.  Managing of the paper documentation for a mortgage can be a challenge without appropriate tools.

The "Technologies for the Mortgage Industry" site was created by Adriana Ieraci, a graduate student at the University of Toronto (Canada).  This site was developed for a graduate course - JCI1503 - Advanced Topics in Computing and Information Systems - as a term project requirement.  Much of the content material and web links presented on this website have been collected from existing sources.  You should not assume that any of this is error-free or that it will be suitable for any particular purpose you may have in mind when using it.  The site is meant to be solely a project in an educational context - and has no other purpose.  The author,  the University of Toronto or any of its divisions, including the course instructors, unequivocally declare that they do not endorse any of the companies or products mentioned or statements made in or referenced on this site.

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