Times they are a changin’. Let’s face it, when the world comes to a grinding halt and people start sheltering in place and social distancing, things are bound to get strange. And by strange, we mean different. But how different? That’s what we’re here to find out.
NEXT is doing a series of exclusive interviews with market leaders to ask them an important question: What are the three ways the global pandemic has changed mortgage lending?
Today our guest is Jeremy Sicklick, the Co-Founder and CEO of valuation and analytics platform HouseCanary. Here’s his take:
1. Buyers used to go see properties, now the properties need to go to them
The digital transformation will speed up. As people stay at home, they will continue to show a desire for virtual home tours and the like. This was a development we long planned for, but COVID-19 brought the need to get this information to the remote buyer quicker. For us, this is where we see our ComeHome consumer real estate platform being useful, in that it partners with the digital lending ecosystem. For that remote buyer, the process of purchasing the process will grow even faster.
2. Certain mortgage lending operations will become even more virtual
Certain operations traditionally done by people will begin to be performed digitally. in mortgage lending, this is beginning to become more accepted as we figure out how to close mortgages virtually. Appraisals and notarization are two areas that are now being performed in remote and automated ways. The replacements of the in-person processes will continue even after temporary solutions such as appraisal waivers and remote online notarizations become technically unnecessary once social distancing orders lift.
3. Mortgage lending needs to understand that disruptive timelines happen quicker
COVID-19 took less than two months to cripple the nation’s economy. It will hopefully only take another two months to begin to claw its way back. That’s a big departure from the Great Recession, which happened on a much longer timeline of crash and recovery. So mortgage lenders need to understand that we won’t have a window of several years to tap the refi window. With interest rates at all time lows, refi burnout will happen this time in 6-12 months, as monetary policy will keep lending conditions favorable. After this period, the mortgage market will shift to a purchase mortgage business as early as 2021.
