How Mortgage Tech Innovation Will Enable Future Real Estate Transactions
Summary
The mortgage software space can itself be broken down into three areas: (1) point of sale (POS) and lead generation or other technologies that sit at the top of the customer acquisition funnel; (2) back-end enabling infrastructure; and (3) capital markets and servicing. In the POS category, the top of the customer acquisition funnel has been the lowest hanging fruit for innovation and, as a result, the space has largely been saturated by a number of early movers. This is a more challenging space to build upon and innovate within because of the complex workflows, well-entrenched incumbents, high cost and difficulty of switching providers, and heavier regulatory and compliance requirements. That may explain why venture activity in back-end infrastructure has increased in the past couple of years, as more knowledgeable mortgage investors pair with strong founders who have the requisite experience. At the so-called “end” of the mortgage value chain, Parker89 recently funded Polly, which has built modern capital markets software, including pricing, hedging and best execution analysis tools.