Page 37 - June 2018 Disruption Report Flip Book

TRANSFORMING MORTGAGE LENDING JAJNUUNAERY20210818
the consumer grants permission. The servicing asset takes on a whole new dimension as an element of the financial value chain in mortgage lending. It’s not just a stream of cash flows... it’s access to everything financial about the customer.
Will the GSEs emerge as the host of mortgage blockchain services? The power and scope of blockchain is also why Dave Stevens of the MBA feels so strongly about the “Bright Line” between primary originations and secondary market agencies. The GSEs will likely be
one of the sponsors of authenticated data, and the step from buying loans to making loans could be a very small step indeed. Blockchain’s promise is speed, reduced cost and the promise of truly seamless fast decisions on new credit in the mortgage lending process.
...Maybe blockchain isn’t that far off... and Dave Stevens’ definition of the Bright Line between GSEs and primary originators is a very real need for the mortgage banking industry.
...Stan Middleman of Freedom Mortgage had an interesting perspective on FinTech in
the mortgage industry. Rather than driving innovation, Stan feels the industry will need to function essentially as an early adopter of FinTech, such as [Fannie Mae’s] Day l Certainty and Single Source driven by GSEs. Any innovation, he believes, has to start there. Mr. Middleman continues:
I think it’s important to recognize one fundamental fact—in the United States, the government fundamentally finances 95 percent of all homeownership... Fannie and Freddie are actually starting to compete in terms of technology. As that starts to change, I think we’ll be forced to be most effective as early adopters, rather than innovators.
As long as the government is going to subsidize housing finance, the driver of the technological improvements will be the agencies. And the companies that are gathering up the servicing for those agencies are going to be, I think, the beneficiaries of that activity.
This view is similar to my own; that is, the GSEs will provide the information utility, whether blockchain or not, and the value of servicing will become more dependent on the relationship value as opposed to the mortgage cash flows. And it’s already well underway at Fannie Mae with Day 1 Certainty and Single Source, and at other FinTech products that provide direct access to a trusted data source that does not have to be reverified. (In Digitally Transforming the Mortgage Banking Industry, James Deitch, 02/28/18)
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