PERSON OF THE WEEK: Does the financial services industry need a new trade association? Don't bother answering, because it has one: the PROGRESS in Lending Association, which defines its mission as ‘educating mortgage participants about how to face real business problems and overcome those business problems through technology innovation.’ This week, MortgageOrb spoke with Tony Garritano, the new association's founder and chairman, about its goals and its role within the mortgage banking industry.
Q: What was the genesis behind the PROGRESS in Lending Association?
Garritano: Progress is defined as ‘a forward or onward movement’ and ‘gradual betterment.’ No industry can exist and thrive without continued progress. The PROGRESS in Lending Association was formed to provide thought leadership to lending professionals about how to create process efficiencies through a combination of sound business strategies and technology. The ideas that come out of this association will help all mortgage professionals provide a more trusted and transparent process.
Q: There are numerous trade organizations within the financial services industry. What makes your association different from others?
Garritano: There are a lot of trade associations, but none are like PROGRESS in Lending. How so? There are trade associations for bankers, for lenders, for Realtors, for mortgage brokers, etc., but we, unlike those associations, are an association that caters to all mortgage professionals.
We were not just developed for bankers or brokers or Realtors, but rather for the entire mortgage industry and every party involved in the business of mortgage lending. Unlike other trade associations, we are dedicated to a cause: the furthering of mortgage lending by combining business strategy and sound technology. There's a void in the space today when it comes to technology thought leadership. We fill that void and offer sound advice to help the industry recover and thrive in very difficult circumstances.
It's about time that the mortgage industry start thinking ahead and take this time to innovate to show the world that we're on the right track.
Q: How would you categorize the state of technology within mortgage banking? Specifically, what are its strengths, and where can improvement be introduced?
Garritano: I'm a glass-half-full kind of guy. I believe that the industry is on the right path but could use a push or two to move a bit faster. We have seen a steady increase in the number of e-notes registered on MERS, and we're seeing the government-sponsored enterprises – because of the mandate passed down to them by the Federal Housing Finance Agency – move to push for a more standard, electronic process.
Why would they move in this direction? They want to ensure a more consistent, accurate and error-proof mortgage process. Mortgage lenders are very risk-averse, so they are sometimes slow to adopt technology until it's proven.
However, with all the pressure from Washington and investors, I think it'll provide that push that I mentioned the industry needs. We are seeing an evolution of the mortgage business. Five years from now, we'll look back at what we did in terms of how we process loans today and think, I can't believe we did it that way for so long; the more automated process that we use now is so much better, faster and cheaper.
Q: What do you see as the near-term future of mortgage banking?
Garritano: The mortgage industry is changing. As new rules and regulations continue to hit the industry, you'll see lenders react by automating. For example, when the Mortgage Disclosure Improvement Act came down last year, you saw a quick increase in the adoption of electronic disclosures. Once everything has settled and lenders know what they're dealing with, they'll start to plan for the future.
What does the future hold? The future is all about putting the right technology in place to make sure that the right borrower gets the right loan and the process is smooth and free from the friction associated with a paper-driven process. In the more traditional paper process, lenders have looked to throw more paper at the process instead of looking at ways to improve that process through automation.
However, the days of throwing paper at a given problem are over, because paper doesn't work. Paper is hard to track, it can be altered and it confuses the borrower. Lenders get that now, and they're gradually moving toward a more automated process. Maybe they're not moving as quickly as some technology innovators would like, but they are finally moving.