A new normal: How homebuying and lending have changed forever
The unfortunate realities of the coronavirus have forced us all to change in dramatic and unexpected ways. In the mortgage industry it’s amazing to see what's been accomplished at each and every level by loan officers, real estate agents, and attorneys--with basically no preparation. And although it hasn’t been easy, the process has been driving exciting changes that will affect homebuying and lending forever.
State shelter-in-place orders forced the entire mortgage and homebuying industry to go fully digital overnight. Borrowers were unable to drop off papers, come into the office for a meeting, or even attend open houses. However, with the right technology in place, the industry has been able to eliminate person-to-person contact and get mortgages closed without an issue.
Across the board, we’ve been able to replicate and re-imagine traditional processes for these new circumstances. We’ve gone from in-home appraisals to desktop and virtual appraisals, and in-person meetings to an afternoon full of laptop meetings over videoconferencing. Many states across the country have also passed legislation making it easier to close a loan virtually through remote notarization, and real estate attorneys are now providing “drive through closings” in which customers can exchange paperwork and keys while sitting in their own cars, so everyone can remain safe and healthy.
Uncertainty in the financial markets has also sparked a wave of changes in the mortgage industry. Guidelines have changed, in some cases rules have been tightened, and many systems have been altered—perhaps permanently. Because the mortgage industry reacted to the crisis swiftly and made changes to adapt to our new environment, we will be better positioned for success when this crisis is over.
The changes made by the housing industry following the crisis of 2008 resulted in a similar wave of altered guidelines and processes. The housing market roared back in the following year,1 and there is every reason to hope that similar results will follow these most recent changes. Hopefully our current health crisis will have a silver lining, in the form of a housing sector that emerges stronger and more customer-focused as a result.