The Quiet Mortgage Tech Debt Crisis — and How Lenders Can Break Free
The Quiet Mortgage Tech Debt Crisis — and How Lenders Can Break Free
The Tech Debt No One Can Ignore Anymore
It didn’t happen overnight but now it’s everywhere.
Lenders have spent the past decade layering tools onto aging LOS platforms. Vendor by vendor, plug-in by plug-in, they built around the core instead of replacing it. It felt like progress at the time. More functionality, more flexibility, more speed. But now those layers are slowing everything down.
It’s like adding floors to a building without reinforcing the foundation. At some point, it doesn’t matter how many new features you stack on. If the structure underneath wasn’t designed to support it, the whole thing gets unstable. The more you add, the riskier it becomes.
That’s where many teams are today: weighed down by systems that are too complex to change quickly, too fragile to scale confidently, and too expensive to maintain.
The Operational Cost Is Reaching a Breaking Point
According to the Mortgage Bankers Association, the average cost to originate a loan hit $12,593 in Q1 2024 — an all-time high. Time to close still sits around 45 to 50 days.
The truth is, for all the talk about digital transformation, the core loan process hasn’t meaningfully changed. Portals got sleeker. Disclosures went digital. But behind the scenes, most teams are still stitching together workflows with emails, spreadsheets, and outdated systems. It’s still taking more effort to move fewer loans — through more tools, with more friction, and at a higher cost.
Layered Systems Are Slowing Everything Down
The problem isn’t one outdated system or vendor but rather the sprawl. Every overlay, every workaround, every new integration adds more friction. Teams jump between systems. Data gets passed from tool to tool. Context gets lost. Business rules live in silos. Even small workflow tweaks can require IT tickets or dev support.
And the cracks are starting to show. The same quick fixes that helped teams move faster are now the things slowing them down.
Rethinking the Foundation
The lenders pulling ahead aren’t just layering on more tools — they’re rethinking how the work gets done. That means consolidating systems, automating repetitive tasks, and giving ops teams the ability to make updates without IT or tickets. It means building workflows that are actually designed for flexibility, not just patched together to get by. It’s not about starting from scratch, but it is about being honest about what’s holding teams back.
And it starts with asking hard questions:
How many systems does it take to get a loan from app to clear-to-close?
Where are we still using workarounds instead of fixing the process?
Do small changes still require IT or dev support?
Can we scale without adding headcount?
The Risk of Standing Still
Tech debt doesn’t show up all at once. It builds slowly until it starts driving up costs, slowing down turn times, and wearing teams out. In a market where margins are tight and timelines matter, operational inefficiency becomes a real liability.
Lenders can keep patching the old playbook or step back and simplify. Because the biggest risk right now isn’t trying something new. It’s holding onto what’s no longer working.
The Tech Debt No One Can Ignore Anymore
It didn’t happen overnight but now it’s everywhere.
Lenders have spent the past decade layering tools onto aging LOS platforms. Vendor by vendor, plug-in by plug-in, they built around the core instead of replacing it. It felt like progress at the time. More functionality, more flexibility, more speed. But now those layers are slowing everything down.
It’s like adding floors to a building without reinforcing the foundation. At some point, it doesn’t matter how many new features you stack on. If the structure underneath wasn’t designed to support it, the whole thing gets unstable. The more you add, the riskier it becomes.
That’s where many teams are today: weighed down by systems that are too complex to change quickly, too fragile to scale confidently, and too expensive to maintain.
The Operational Cost Is Reaching a Breaking Point
According to the Mortgage Bankers Association, the average cost to originate a loan hit $12,593 in Q1 2024 — an all-time high. Time to close still sits around 45 to 50 days.
The truth is, for all the talk about digital transformation, the core loan process hasn’t meaningfully changed. Portals got sleeker. Disclosures went digital. But behind the scenes, most teams are still stitching together workflows with emails, spreadsheets, and outdated systems. It’s still taking more effort to move fewer loans — through more tools, with more friction, and at a higher cost.
Layered Systems Are Slowing Everything Down
The problem isn’t one outdated system or vendor but rather the sprawl. Every overlay, every workaround, every new integration adds more friction. Teams jump between systems. Data gets passed from tool to tool. Context gets lost. Business rules live in silos. Even small workflow tweaks can require IT tickets or dev support.
And the cracks are starting to show. The same quick fixes that helped teams move faster are now the things slowing them down.
Rethinking the Foundation
The lenders pulling ahead aren’t just layering on more tools — they’re rethinking how the work gets done. That means consolidating systems, automating repetitive tasks, and giving ops teams the ability to make updates without IT or tickets. It means building workflows that are actually designed for flexibility, not just patched together to get by. It’s not about starting from scratch, but it is about being honest about what’s holding teams back.
And it starts with asking hard questions:
How many systems does it take to get a loan from app to clear-to-close?
Where are we still using workarounds instead of fixing the process?
Do small changes still require IT or dev support?
Can we scale without adding headcount?
The Risk of Standing Still
Tech debt doesn’t show up all at once. It builds slowly until it starts driving up costs, slowing down turn times, and wearing teams out. In a market where margins are tight and timelines matter, operational inefficiency becomes a real liability.
Lenders can keep patching the old playbook or step back and simplify. Because the biggest risk right now isn’t trying something new. It’s holding onto what’s no longer working.