eMortgage Adoption: Acceleration through the Pandemic

Abstract

Adoption of fully electronic mortgages (eMortgages) jumped over the past few years. This study examines the reasons why adoption of eMortgages had lagged and why the market may currently be at a tipping point, moving toward a period of more rapid adoption. The study also examines industry-level productivity statistics to determine the extent to which this adoption has led—and could in the future lead—to faster processing speeds and thereby lower costs for lenders and borrowers. In prior research regarding technology adoption in financial services, there is a theme that cost advantage isn’t enough to promote adoption: It takes time to overcome institutional constraints, central counterparties need to adopt and accept the technology, and sometimes an external shock is needed to move things along. The COVID-19 pandemic has been such a shock for the mortgage industry, accelerating adoption of a number of digital processes.