nonbankWith large banks dealing with low profit margins, high legal risks, and poor reputation – especially since 2008, alternative mortgage lenders are rising to become the major players in the mortgage industry.  Alternative mortgage lenders are non-bank companies without customer deposits. They are a convenient and efficient choice, as they offer mortgage rate transparency and help borrowers to complete the home loan process online.

One type of alternative mortgage lenders are marketplaces and brokers, who help potential borrowers shopping for mortgages find the best mortgage rates. Mortgage marketplaces (like LendingTree, Mortgage Hippo, Zillow, eLoan, Google Compare) generate potential lenders based on their mortgage rate algorithms. The referring marketplace site receives a [lead generation] fee for the rate option you choose, and you then complete the loan process with the lender. There are also many online mortgage brokers that will personally guide you through the home loan selection process. These online mortgage lenders seek to shorten the [albeit onerous] home loan process.

In addition, there are also community based lenders who offer solutions to credit-challenged consumers, as they face fewer government regulations, compared to that of larger mortgage bankers. In addition, credit unions also play a growing role in the mortgage industry. They originated more than 8% of U.S. mortgages in 2015, nearly double their amount in 2010.  They are often “relationship based”, brining in new types of criteria for their decision process.

According to the Federal Reserve, alternative mortgage lenders now account for almost half (45%) of all home loans. With more options for prospective homeowners to choose from, alternative lenders have the ability to transform the mortgage loan process with faster approvals through online application and document processing. (source: http://bit.ly/1PQw4Qe)

StreamLoan is powering not only the traditional mortgage brokers, but many of these alternative mortgage lending providers – we believe the customer experience should be simple, digital, and mobile regardless of the lender selected.  We have a rapid on-boarding process for the lenders, allowing them to go from non-mobile, non-digital, to a completely mobile and digital solution without the heavy lifting of spending millions of dollars and years of IT development time.  If this sounds interesting to you – please reach out to us info@streamloan.io

Readers–what are your thoughts about going to an alternative mortgage lender versus a direct lender? We would love to hear your thoughts.