Why is the mortgage market so slow with technology?

The fact that firms are still using fax machines shows plenty more progress is needed.

When was the last time you used a fax machine? For most of us, they have thankfully been consigned to history.

One of the biggest users of fax machines today is the NHS, with almost 9,000 still in use, though the new health minister Matt Hancock – the former digital minister – has pledged to get rid of them.

Another industry that is still bizarrely attached to the fax machine is the mortgage market, where the continued use of these relics only serves to make an already torturous process that much worse.

Why are we still using fax machines?

When you purchase a property, your conveyancer will have to send over a certificate of title to the mortgage lender.

Essentially this is a document that confirms that the purchase meets the conditions and requirements of the lender, as well as the completion date, and is used to request the release of the mortgage advance.

In other words, it’s a really important document. And yet, for many transactions, it’s sent by post or fax machine.

This week conveyancer LMS launched an electronic version, which means you can do the whole thing digitally. Thankfully some really big lenders are already on board – including NatWest and Royal Bank of Scotland – with other lenders to follow.

This is obviously very welcome as sending the certificate of title electronically is not only a lot quicker and more straightforward, it also allows for greater verification of who is sending – and receiving – the document, which should help prevent fraud cases too.

But it seems incredible to me that this isn’t already a standard offering.

Why on earth are we relying on Postman Pat to handle the transport of these documents, or even worse attempting to send them over using technology that most people ditched in the days of dial-up internet?

It’s little wonder that so many people rank buying a house as the most stressful thing they will ever do.

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No tech please, we’re British

For some reason, the mortgage market has been spectacularly slow when it comes to embracing technology, particularly when you compare it to other areas of financial services.

Take mortgage advice. The vast majority of mortgage borrowers go to a broker to help them find the right deal.

Yet it’s only in the last year or so that we have seen digital mortgage brokers, who use algorithms to speed up the process of helping borrowers find the right deal for their circumstances, start to gain a little traction.

This sort of technology is already being used regularly in other areas of finance but, in mortgages, it’s viewed with suspicion.

Even the most basic forms of technology are being overlooked.

A survey by trade title Mortgage Solutions last summer found that a frankly absurd 40% of brokers don’t even have their own website.

Digital mortgage brokers: will you save money on your home loan by getting advice online?

It doesn’t have to be like this

A couple of years ago, YouGov carried out an interesting survey looking at how satisfied people felt with the mortgage application process at the various stages of that process – so from the application stage to the financial stage to getting documents certified to the final completion.

And it found that satisfaction levels dropped the further along the process people went. What’s more, only one third (33%) felt satisfied at the outset, so things started poorly and just got worse.

When I remortgaged last year, the whole thing should have been really straightforward. I didn’t need advice, I wasn’t borrowing any extra or changing my mortgage term, and I was sticking with the same lender.

But it took WEEKS, with form after form needing to be signed and then posted, signed and then posted.

There are so many opportunities throughout the mortgage and property process where we could use technology more, where it would speed things up and cut out some of the daft little errors that then lead to massive delays.

Some of this will come down to regulation. More stringent rules have been put in place in recent years to ensure there is no repeat of what was going on in the build-up to the financial crash, and that’s undoubtedly a good thing.

But there are enough little green shoots of innovation to show that it’s possible to utilise more technology and still meet those regulations.

We are surely long past the point when fax machines should have been retired from our home loan process.

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