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ere's no doubt that we are living in times of accelerated change.
If you look at how any industry has evolved over the past 100 years—
whether it's travel, communications, or entertainment—you will see
a sharp contrast between how slowly things changed a century ago
compared to how quickly they are changing today.
As just one example, vinyl long-playing
records, or LPs, were the standard for decades
until the mid-1960s, when 8-track tapes and
cassettes took over. en came CDs in the
1980s, followed by digital music files in the early
2000s. Now, most people stream their favorite
music through online apps. LPs still exist, but
their primary value is based on nostalgia.
Eventually, everything changes, but some
things take longer than others. Innovation
such as artificial intelligence, machine learning,
and data capture technologies have taken hold
in loan manufacturing but have been slower
in adoption on the secondary marketing and
servicing end of the market. Here they could
be enabling faster, more efficient mortgage
servicing rights (MSR) acquisitions and
onboarding of loans. eir potential to
transform the secondary market is undeniable.
THE COSTS OF YESTERDAY'S
TECHNOLOGIES
An abundance of diligence questions
along with legacy systems with wildly differing
customizations has led to a lack of any type of
consistency or uniformity in how institutions
behave in the secondary market today. As a
result, an institution that sells loans of the
exact same asset class to both Buyer A and
Buyer B is going to have two totally different
experiences. is lack of continuity really makes
it cumbersome for all parties involved.
ere are advantages to using trading
platforms, of course. ey are, on the whole,
THE TIMES,
THEY ARE
A' CHANGIN'
Artificial intelligence could transform the acquisition of
mortgage servicing rights—and the secondary market as
a whole.
Feature By: Craig Riddell
