Increasing Transparency in the Mortgage Process

Headquartered in Canonsburg, Pennsylvania, SingleSource Property Solutions was established in 2000. In 2015, SingleSource merged with iMortgage Services, creating a comprehensive range of services that can be applied across the entire loan origination process and servicing cycle.

SingleSource was founded by Brian Uffelman, Chairman; Brian Cullen, CEO; and Andre Lacouture, President. Their friendship began in elementary school and has never wavered since. In 2015, they realized the potential to merge the product offerings of their two companies to create a true one-stop-shop for the industry. The vision and friendship of these entrepreneurs has brought together a strong company culture and created one of the largest privately held vendor management companies.

Dean Kelker serves as SVP and Chief Risk Officer at SingleSource, where he is responsible for managing regulatory, compliance, and financial risks. Kelker brings more than 30 years of real estate finance experience managing collateral, credit and compliance risks for lenders, credit risks for a mortgage insurer, and mortgage default investigations for a due diligence firm to his role.

He is also a current Real Estate Valuation Advocacy Association (REVAA) Board Member and served as Board President in 2020. Dean has also volunteered and served as a Board Member for Habitat for Humanity of Greater Pittsburgh.

MortgagePoint recently had a chance to speak with Kelker about the future of the housing industry, and how advancements in the tech sector will arm both the consumer and lender with the knowledge to reduce pain points in the home loan process.

What’s in store for the housing market as we enter 2024? What are some of the headwinds that the industry will be faced with in the coming year?
Dean Kelker: The housing market will continue to be challenging as we enter 2024 due to high interest rates and low inventory resulting in declining affordability. We will likely end 2023 with interest rates in the 7% range which may continue to reduce the affordability of housing for many, while at the same time, discouraging existing homeowners from selling and/or upgrading their housing due to the loss of very low interest rates in the 3%-4% range that they refinanced or purchased a couple of years ago. The reluctance to move will keep inventories low and home prices generally high. However, we are entering the election cycle which normally means some additional level of economic growth during 2024.

Recent government statistics indicate a lessening in core inflation that will likely begin some moderation in the Federal Reserve’s monetary policy resulting in a reduction in interest rates during 2024. A modest reduction in interest rates will likely trigger some additional increase in refinance activity for those homeowners that purchased during the period of peak interest rates.

The housing headwinds will continue to focus on availability and affordability as inventories remain low and prices continue at or near their current levels.

Another element of the 2024 headwinds will be a factor that has not been present for the past several years. That element is the resumption of student loan repayments which were suspended during the pandemic. The added burden of this debt service will mostly impact the generational demographic that is in its primary home buying age range. More than half of current home purchases are being made by Baby Boomers, which is a direct reflection of who has the capability to purchase housing in the current market environment.

Are there any trends in technology you are witnessing being employed by the industry to streamline operations?
Dean Kelker: The technology trends in the industry are focused on a couple of significant areas. The first is artificial intelligence (AI). AI really lends itself to real estate finance because many of the decision points are based on the concept of “If This, Then That.”

Therefore, it becomes relatively easy to build rule sets that allow for decisioning based on specific data inputs. This obviously requires a high degree of data integrity and validation which AI can manage as part of the decision-making process.

Another major technological initiative is the further evolution and development of mobile-first technology. The younger generations are accustomed to managing many, if not most, of their business interactions through their mobile phone. Therefore, to successfully reach this demographic, it is critical to be able to access them and interact with them through their mobile devices. As a related issue, this demographic also has an expectation that transactions will be handled and completed quickly. Consequently, it is important that technology reduces traditional cycle times so that transactions can be completed as quickly as possible, while at the same time, being as transparent as possible for the consumer.

As AI and machine learning (ML) continue to advance and evolve as everyday tools for the industry, will we ever be able to rely 100% on these tools or will the human touch always be a necessary part of the origination process?
Dean Kelker: While AI and ML are extremely powerful tools, we are currently not in a position to rely on these tools for 100% of the origination process. There are still elements of the process that are somewhat subjective in nature and require human intervention to make the final decision. What I do visualize is a time where AI and ML can decision the vast majority of origination applications and decisions with humans making the call on those transactions that fall into the uncertain area or somewhat outside of the normal decision parameters.

AI and ML will ultimately generate data that will likely establish the foundation for identifying and approving transactions that in the past were declined because of a lack of performance data. This will, in turn, allow the expansion of the eligible borrower base.