My wife @Juliacrump runs her own business as a mortgage and equity release broker. Along with most of us, she has had to adapt her ways of working to cope with the distancing measures in place; moving to online rather than face to face meetings is an obvious example.
As the lending application processes are all online, these have continued as before. However, some of her work is now grinding to a halt. The reason; lenders have stopped all mortgage valuations. This makes some sense when you consider Surveyors instructed to perform valuations may need to examine inside the vendor’s home, putting an unacceptable risk on both parties.
However, on another level, it highlights how the mortgage process is a curious mixture of (dare I say) 19th, 20th and 21st century processes. Physical ID documents must be presented in person and checked (Digital IDs such as Yoti.com can fix that); Paper bank statements photocopied or scanned (Open banking perhaps?), self-employed accounts ink-signed and mailed (electronic signatures anyone?). At some point, the lender will want to know if the property being mortgaged represents a good security risk by commissioning a survey. And the application can go no further until the Covid-19 lockdown is over.
That is, unless the lender already knows right at the start of the process if the property meets its lending criteria. Imagine a process whereby a mortgage enquiry triggers an instant decision on whether to lend to this person against the property. Couple a credit risk score with a property lending risk score and you have an Instant Mortgage offer. Like the credit score, the property risk score is created by fusing and analysing data from multiple sources to build a rich picture of the property being mortgaged. How big it is; what type of property; when it was built; number of bedrooms; flood, subsidence and crime risk – the breadth of data is increasing constantly and with it the possibilities for exploitation. My colleague Steve Walker recently blogged https://www.mapcite.com/2020/02/28/productivity-innovation/ about how Mapcite is helping Banks to realise the instant mortgage dream by amalgamating datasets into risk scores.
Perhaps the current crisis will provide to be the impetus for other lenders to act?