Odd Lots Why You Can't Get a One-Click Mortgage Refi
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Dec 12, 2024 
Mike Yu, co-founder and CEO of Vesta, discusses the surprising challenges of mortgage refinancing in the digital age. He highlights why securing a mortgage isn't a simple one-click process, attributing it to outdated IT systems and strict regulations. The conversation delves into the complexities of integrating modern technologies like AI and blockchain into legacy platforms and how institutional inertia hinders progress. Yu emphasizes the urgent need for streamlined processes and better data sharing to enhance the homeowner experience.
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Pencil and Paper Mortgages
- In the past, mortgage applications were predominantly offline, filled out with pen and paper.
- Loan officers would interview borrowers, manually complete forms, and then have assistants enter the data into systems.
Rocket Mortgage's Impact
- Rocket Mortgage's Super Bowl ad promoting a "push button, get mortgage" experience shifted the industry towards online applications.
- This ad pushed banks to adopt more digital processes to remain competitive.
GSE Technology
- Fannie Mae and Freddie Mac, despite being under conservatorship, have invested in modernizing their technology.
- However, some of their core systems, like Desktop Underwriter and Loan Product Advisor, still rely on older technology from the 1990s.