Summary
Emerging technologies in the mortgage industry - Servicing
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Extract
The dawning of a new era.
Some key emerging technologies will dramatically transform the business landscape. Companies that cannot adapt to the new environment will be vulnerable to extinction.
Technological change is reaching fever pitch. The mortgage industry is moving to keep pace, yet not as rapidly or widely as generally believed. New technology takes at least two to three years to reach mortgage companies. Some of the delay stems from the time it takes mortgage technology vendors to incorporate new developments into their products, while some of the lag comes from mortgage managers being too conservative in their technology investments. A new industry paradigm is in the offing. Communications networks and data base software will enable (if not force) a new way of doing business. Those lenders failing to anticipate and organize around transformational technology will face declining profitability and possibly extinction. In their book Competing for the Future, Professors Gary Hamel and C. K. Prahalad observe that "on average, senior management is devoting less than 3 percent of its energy building a corporate perspective on the future." For many companies, this may be their fatal flaw. Despite all apparent urgency, many mortgage companies have yet to automate their most basic operations. According to MORTECH (a biannual study of technology in the mortgage industry), in 1994, 78.8 percent of mortgage companies reported having automated loan production. At the same time, only 53.9 percent had automated their secondary marketing operations [ILLUSTRATION FOR FIGURE 1 OMITTED]. A large portion of the mortgage industry is just now learning to manage technology. Over the six-year period for which data is available, 1988 to 1994, one out of four mortgage companies ...See the full content of this document
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