Trends that will move mortgages and housing in 2022

In the Amazon age, consumers are and less patient than ever. Tap your phone and, voilà — hot food from your favorite restaurant arrives in minutes. High-end electronics appear on your doorstep in hours.

The mortgage industry has yet to deliver anything like that level of instant gratification. The typical time from application to consummation of a mortgage is 50 days, according to ICE Mortgage Technology.

"The mortgage space is many decades behind everyone else," says Chris Boyle, a longtime executive at mortgage giant Freddie Mac and now president of home lending at Roostify.

Boyle’s company is one of many aiming to hasten the process so that closing times might someday be measured in days rather than weeks. Roostify is part of a new breed of property technology, or "proptech," companies that aim to pull home loans and property sales into the digital age.

Here are trends to watch:

Mortgages: Getting to yes faster

Digital players want to close your mortgage more swiftly.

One obvious obstacle, according to Jess Kennedy, co-founder of Beeline: Mortgage giants Fannie Mae and Freddie Mac, who set the rules for most mortgages, have built-in seven day minimums for many processes.

So proptech companies are focusing on a different goal – giving consumers a yes or no instantly.

Beeline, a lender that does business in two dozen states, promises to let borrowers know exactly where they are in the process at any moment. "We liken it to the Domino’s Pizza Tracker," Kennedy says.

Roostify, which works to speed the mortgage process on behalf of lenders, has a similar approach. "You want to give the consumer certainty," Boyle says.

Roostify focuses on time savings by automating paper-intensive parts of the process, like verifying tax returns and pay stubs. Having an actual human look at every document adds days and weeks to the timetable, Boyle says.

But automation takes lenders only so far with complex mortgage applications.

Every application is unique, and loan applications from self-employed borrowers and real estate investors can stump even veteran loan officers. In other words, programming a robot to shepherd a $300,000 loan through approval ain’t easy.

"Every single application is a snowflake," Kennedy says. "It’s really hard to create a system that can account for every beautiful snowflake."

Home appraisals: Analysis goes virtual

The U.S. housing market is booming despite a chokepoint: There just aren’t enough property appraisers to visit and evaluate all the houses changing hands and being refinanced.

Hoping to find at least a partial solution to that problem, the overseer of Fannie Mae and Freddie Mac will begin accepting more "desktop appraisals" in early 2022. The Federal Housing Finance Agency announced that remote valuations will take the place of some traditional live appraisals.

Even if they don’t tour homes in person, appraisers still will rely on a variety of data sources, including property photos posted in the multiple listing service.

iBuyers: After a setback, still going strong

In 2020, as the pandemic first threatened the economy, iBuyers, or instant buyers, slowed their roll. Then, when the housing market boomed, they became aggressive buyers of homes in Sun Belt markets. In 2021, Opendoor, Offerpad and Zillow Offers paid sellers premiums.

Skeptics wondered whether Zillow’s approach made business sense. In early November, Zillow conceded that it was paying too much and shut down its Zillow Offers unit.

"They just got in over their head, couldn’t scale, didn’t understand the complexity," says Ken Johnson, a housing economist at Florida Atlantic University.

Yet other iBuyers are still in business. Stefan Peterson, co-founder of Zavvie, a real estate technology company that works with brokerages to help sellers compare offers from iBuyers, says the remaining iBuyers will dial back the generosity.

"It’s been kind of an open secret that iBuyers were making very strong offers," Peterson says. "They seem to be coming back down to earth, but they’re still very close to 100 percent of (market value)."