In 2008, the worst financial crisis since the Great Depression hit the world with shocking and reverberating consequences. People lost their homes, their hard earned savings, and many were left with nothing to their names.
Though it probably feels like that was yesterday to many of us, that was almost exactly ten years ago. The impact of the 2008 recession is still being felt by millions of people, and though trends in the economy appear to be looking up, apprehension to return to business as usual abounds.
How the financial crisis impacted the mortgage market
While the 2008 recession was a result of a combination of factors, years of irresponsible mortgage lending practices in America were a key player. The mortgage industry was hit hard by the impacts of the financial crisis. People could no longer afford to purchase homes, and even those lucky few with enough money leftover to pursue property ownership were understandably reluctant to trust the mortgage industry at large. Housing confidence was shot, and the mortgage market needed to work on their look.
The mortgage industry has notoriously lagged behind when it comes to technological development. While other financial branches have embraced tech as a way to improve their business practices –– most notably the realty and investment industries –– the mortgage field has avoided any “new” or “experimental” advancements, perhaps partially in order to dispel additional consumer skepticism.
But the recession isn’t the only factor dictating mortgage marketing technology trends. The mortgage development and sales process is incredibly complex, and the liability associated with handling this process exclusively online without the intervention of an actual real-life human could be huge. Additionally, maintaining the traditional person-to-person transaction of a mortgage has meant that technological development has taken a backseat in the industry.
The Mortgage Industry and a Tech Tipping Point
Despite the trend to stay safe, industry experts are buzzing that the mortgage market will soon hit a tech tipping point, one that will send the entire industry into a game of calculated technological catch-up.
Mortgage experts are calling out the value of technology to the industry, specifically in back-office functionalities. For example, experts seem to agree that a “robo-advice” bot, or a tech entity built to replace the person-to-person mortgage sales process, seems unlikely. However, these same individuals suggest the value of a cyborg that can catalogue and collect user information in accordance with their bank and creditors, taking the responsibility off of the applicant to provide all relevant information during a stressful time, and acting as an objective party in seeking out the best possible rate.
If you are a potential homeowner beginning to investigate the complex world of the mortgage process, your first step should be to do a credit check up. Knowing your credit standing is a vital tool in the homebuying process. If your credit has suffered as a result of old financial habits or debt, there are solutions out there that can help you get through the mortgage lender threshold.
If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated every 14 days.