“It’s very hard to argue with success, seeing reduced cycle times, and higher pull-through on loans. New methods are the best motivator for championing the new digital mortgage process.”

Shifting home buying trends and consumer expectations are key factors impacting mortgage lending. In today’s market, mortgage qualification consistently changes as the gig economy grows, multi-application home purchases take over, and more Generation Z buyers enter the market. In a constantly evolving industry, how can mortgage lenders meet new expectations?

Fortunately, CoreLogic thrives on answering industry-changing questions. The property data and analytics giant offers automated underwriting tools and digital solutions designed to meet borrower expectations while improving efficiency for lenders. Zebulon Lowe, experienced mortgage professional and Director of HousingWire’s Content Studio, recently sat down with Senior Leader of Product Management Sri Gajjala to explore home buying trends and the digital shift in consumer expectations. Gaijala also explores CoreLogic’s unique tools to benefit consumers and innovate mortgage lending.

This interview has been edited for length and clarity.

How generational changes and new expectations force lenders to adapt

Zebulon Lowe: From your perspective, how do you feel home buying trends have changed in 2024?

Sri Gaijala: Over 2024, two persistent trends in the post-pandemic have converged. First, the gig economy continuously expands market qualification. Since home buyers could become more established in these roles, those income streams are eligible to support mortgage qualification. This change opens the market for additional borrowers and higher loan qualification amounts.

Secondly, there’s an increase in multi-generational and multi-application home purchases, with more families pulling together to qualify. While this phenomenon is standard in the industry, current economic pressures have created a huge boom in collaborative home purchases. Together, these two pieces have typified the current home buying landscape—which is all about maximizing purchasing potential in this highly competitive market.

CoreLogic helps mortgage lenders understand and meet new economic demands

Zebulon Lowe: How can the mortgage industry better anticipate changes in home buyer behavior as economic pressures like rising home prices and student debt reshape mortgage ownership?

Sri Gaijala: Lenders need to engage with innovations that buyers resonate with instead of relying on industry-standard approaches that have existed since the pre-pandemic era.

Lender apprehension over digital tools and verification methods has subsided, and borrowers are far more likely to go all-digital or utilize a self-driven documentation approach.

Today, the mortgage industry embraces technology to meet buyers’ evolving needs. For example, AutomatIQ Borrower is an underwriting tool that facilitates faster, more reliable decision-making. It can reduce costs by minimizing buyback risk while improving loan production efficiency. Automatic Borrower also facilitates depth and accuracy in financial assessments, essential for real estate professionals transitioning into co-borrowing. This technology supports that transition with a holistic income evaluation, precise asset analysis, and detailed liability scrutiny.

Defeating the biggest barrier to technological innovation in mortgage lending

Zebulon Lowe: What are the biggest barriers for mortgage lenders in fully embracing technological innovation, and how can the industry overcome these challenges?

Sri Gaijala: Internal adoption and integration are The largest obstacles to adapting to new technology expansions. Internal policies and procedures often prepare lenders to ingest and keep up with the dynamic nature of these tools. However, in an industry where guidelines are historically slow to change, there may be significant internal resistance to adopting new methods. Although borrowers highly favor digital asset verification, the adoption rates are much less than 50%.

The best way to combat these issues is to target solutions that align with your company’s existing workflow strengths. Those solutions can easily integrate, allowing you to benefit consumers and originators.

Rather than contacting individual vendors with one-off solutions, look for platforms or services already streamlined for integration into existing environments. One such tool is CoreLogic’s AutomatIQ Borrower, a comprehensive solution built by underwriters for underwriters. It combines verifications and analysis into an integrated workflow. AutomatIQ Borrower is a one-stop shop where you can order GSE-certified verification products. The data is automatically orchestrated analysis solutions to evaluate borrower income, assets, and liabilities.

The result is a streamlined workflow that automates your simple, no-touch decisions and simplifies complex data for one-and-done reviews.

Embracing flexibility and responsiveness to meet changing market and consumer needs

Zebulon Lowe: How can the mortgage industry create a more flexible and responsive system to meet the current home buyer needs while anticipating housing market and consumer preference changes?

Sri Gaijala: Being open to product and guideline diversity is the key. Also, offering alternative qualification methods, digital tools, or applying qualitative analysis to show a borrower’s ability to repay will be how a lender can emerge as a preferred partner for home buyers.

We’ve already seen some industry level movements in this direction. Fannie Mae and Freddie Mac’s expansion to use asset reports for income documentation alternatives is an excellent step in the right direction. Advocating for new documentation methods that align with the latest digital landscape that borrowers rely on will keep the industry from lagging behind borrower needs in constantly-changing market environment.