Does big data have a place in the mortgage industry? Not on the basis of what you may have seen to date. Anyone who has applied for a mortgage knows that there is an enormous amount of information collection to do and not a lot of automation. Compare our industry to the insurance world. The application process is very simple. There is very little data entry because companies can pull in a lot of data for you that you essentially validate for them.
All the extra work in the mortgage industry is the reason big data is a major push for our company in 2015. How can we maturely pre-populate a lot of financial loan applications for consumers and make that process simpler and easier? As so many companies are doing, we're looking at big data for sources of competitive advantage. For us, the big data process involves aggregating data from multiple, different sources. It's not exceptionally creative, but taking pain out of the consumer's world needn't be. We're not using data to tell where a hail storm might hit.
Another area for big data use in the mortgage industry is on the back side, as we call it, projecting mortgage volume in particular areas of the country and among particular sets of borrowers. The outcome of this work is ensuring that we’re in the right locations and target-marketing the right folks with the right offers. Then when they're ready to fill out a mortgage application with us, it should be becoming progressively easier.
The conundrum in mortgage activity is that it's almost impossible to predict and project no matter how much data you have, because it’s really all tied to rates. Rates drop, purchases and refinances go up, but all of that activity is driven by predicting rates. The only formula for success outside of rates is working to ensure you’re in the right location.
If this all sounds like a good job for some big data analytics approaches, you're right on the money. When big data and the mortgage industry fully merge, however, you may be able to complete or check on a mortgage application from where you're sitting right now, even if that's in a cafe with your mobile phone.
Tim Elkins joined PrimeLending in November 2008 as Senior Vice President, Chief Information Officer. In October 2012, Tim was promoted to executive vice president, chief information officer, and he is responsible for information security, IT operations, and technology initiatives.
