MReport April 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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M R EP O RT | 43 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION The State of Mortgage Originations in a New Decade The report says AI and machine learning are critical moving forward. A ltisource released its 2020 "State of the Originations Industry" report recently and found that 22% of those surveyed said artificial intelligence as the most important factor in a com- petitive mortgage market. "While the cost to originate a mortgage has continued to rise in recent years, advances in technol- ogy are providing opportunities to improve the bottom line," said Ben Hall, VP, Product, Altisource. "It is more important than ever for organizations to invest in technol- ogy and work with vertically inte- grated third-party service providers to leverage leading technology solutions." The report says AI and machine learning are driving new technol- ogy adoption in two areas: point of sale (POS) solutions and back- office workflow. "POS solutions are being used to improve the customer experi- ence by making the process of applying for a loan more simple and consistent. Back-office work- flow incorporates AI and machine learning to improve quality, drive efficiency, and enhance margins for early adopters. Two examples of how organizations are using these technologies include high- volume document processing and intelligent data extraction," the report said. Mortgage professionals noted a high level of concern for loan production expenses, and they will continue to increase and volume will drop. Ninety percent of those surveyed cited concern, which is up 78% from 2018. The leading ways to adjust the increased cost of production were adding automation to the process (24%) and consolidating vendors (24%). The survey found most orga- nizations plan to expand their product offering for non-Qm mortgage loans, construction lending, and HELOC over the next six months. Also, more than two-thirds origination profession- als plan to expand their offering to include HELOC (67%), followed by construction lending (62%), and non-QM (61%). More than 200 mortgage profes- sionals were surveyed for the report between July 17 and July 27, 2019. The Mortgage Bankers Association reported mortgage ap- plications fell 6.4% from the prior for the survey ending on February 14. The refinance index fell 8% from the prior week and was 165% higher than the same week in 2019. The seasonally adjusted Purchase Index decreased 3% from one week earlier. The unadjusted Purchase Index increased 2% compared with the previous week and was 10% higher than the same week one year ago.

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