‘Time waits for no-one’ and judging by the number of conversations we’ve been having, particularly with a wide range of lender representatives, this current crisis has brought that home perhaps more than at any other point since the Credit Crunch.
There are, of course, many reasons why the COVID-19 situation is very different to those dark days of 2007 through 2009 (and beyond), but I think it’s fair to say that 2020 is going to mark another watershed moment for our sector. A point after which the market may look very different to those years prior to it.
From our perspective, this is a turning point for the entire lending sector; indeed, it may also be a turning point across so many other sectors as well. I read a recent article on the BBC News website about the signing of wills during the pandemic and what people are having to do in order to secure witness signatures.
It is farcical in this day and age, that people are holding their documents in place with windscreen wipers and signing wills on their car bonnets, when we have perfectly useable systems securing digital signatures online without anyone having to leave their homes. Change has to come.
Back in the world of mortgages and the housing market, COVID-19 is likely to act as the catalyst for any number of moves designed to actually utilise the technology we have and ensure that transactions are not halted prematurely.
A lender contact of mine summed up the future recently when he suggested that no longer could anyone active in this space afford to ignore what has been going on right under their noses.
He told me how every event or exhibition he’s been to in the last 12-18 months has included at least one session on desktop and AVMs, online ID verification, blockchain, and the move towards a much more digitally-focused house purchase transaction process, and yet his own lender has still managed not to introduce any of this.
Post-COVID-19 – or should I say during this pandemic – large numbers of lenders, indeed the whole mortgage market, is going to have to reassess how they conduct business, and certainly what is acceptable in order to move cases forward which are otherwise stuck at the physical valuation stage.
I’m pleased to say that this change is already happening – already over the course of the last few weeks, we’ve heard from a growing number of lenders who have changed their systems in order to accept our desktop valuations, and by the end of this lockdown, there will be many more who are either at this destination or moving along this path.
We’re aware of the difficulties that many in the specialist lending community currently have, given the fact they have to securitise assets and that for funders and investors, only a physical valuation will do. However, the sophistication of the automated/desktop valuation has moved on at such a pace that there needs to be real reassessment of the reasoning behind this and why it can’t be made to work in the future.
Some lenders are looking to split their product ranges on automated/physical valuation lines, and no doubt the former might mean lower LTV/higher prices initially, but we’re confident that as the industry becomes more comfortable with the results they’re getting and the risk they are taking on, they’ll be able to broaden their product offerings.
All in all, while this is a devastating period for many in the industry to be working through, the future is likely to bring any number of new benefits to all stakeholders. We will have little choice, collectively, but to embrace the digital, even for a process which can seem so archaic as the one we have in the housing market.
It is ironic that embracing the technology available has allowed many of us to continue working away from our offices, but that we have hit a stumbling block in the lack of tech take-up in order to keep the business flowing through the pipes.
These need not be mutually exclusive, and we are hoping that the next stage is a much more focused and digital process that would mean – heaven forbid – that should we ever have to go through this again, then we’ll be in even better shape to make things work.