Thursday, October 06, 2022

I have to admit I was not only surprised but super impressed when an item I ordered online at 8 am arrived at my home by 6 pm that evening. I was expecting “next day delivery,” which the confirmation said online, but there it was at my door when I got home from work that night. Granted, it was a reoccurring order and not something I needed that day, but impressive nevertheless.

While I was still rejoicing about the impressive delivery, I opened the second box to find the sports joggers I ordered a few days back had arrived as well. This was the first time that I bought this type of item online, but I thought it would be easy enough as I literally copied the tag on my current pants, which I was very happy with. I ran to try it on. Unfortunately, it was not at all like the ones I had.

The pockets were different; the material was different; the bottom of the pants was different. The only thing that was the same was the brand. I quickly went from being thrilled about my first online delivery to being unsatisfied with my second order. It’s apparent that not every product can be effortlessly purchased online without actually going to a store to view, try or examine the specific item one is seeking.

I realized that many mortgage applicants might experience the same contrast when getting a mortgage online. While technology has made it very seamless to apply for a loan, the end product that gets delivered can often be very different than what the client expected or needed. What’s worse is that the average customer may not even realize that they ended up with the wrong product.

A society that demands instant gratification is forcing the mortgage industry to adopt and make getting a mortgage faster and easier. Unfortunately, with loan products, however, we aren’t talking about a difference in appearance and style. We are potentially talking about tens of thousands of dollars over the life of the loan.

While the “faster” and “easier” objective is improving, the output is actually getting worse for the mortgagor. In 2020 almost 10% of home purchase applicants were denied. A majority were from online lenders who do not possess the ability to work individually with clients on a personalized basis. A recent SEC filing by a successful online lender showed that almost half of its staff was outsourced overseas. While I am sure these staff members are very friendly and cordial, there is something to be said about explicitly working with a trained and dedicated mortgage representative who has the proper licensing and experience to be of real value and assistance.

Another emerging trend in the real estate and finance industry is that of one company handling many integrated services such as insurance, title, mortgage - and even the buying and selling of homes. In an attempt to make it more accessible and quicker, many fear that the “delivery” of the actual product will suffer to the detriment of the client.

I know – it is a different world, and technology has progressed in ways that were unimaginable even a decade ago. Despite these enhancements, a homeowner or aspiring home buyer should still carefully do their research and not merely rely on a click of a button for the most significant liability of their lives.

Shout out and Happy Birthday to Adam Ehrenreich, Reuven Escott, Alan Finkelstein, Efrona Hagler, Naphtali Hoff, Yaakov Morgenstern, Sylvia Nachtigal, Aliza Rosansky, Karen Rubin, Penny Samuel, Roni Schwartz, and Avi Tsadok

Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected]

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