Mortgage Lenders Must Become Tech Companies
Mike Yu, CEO of Vesta, on building a new system of record for the mortgage industry
This shifts competition in mortgage from who has the best branch network to who has the best software stack. A lender now has to build fast borrower intake, automated document collection, API links to pricing and verification vendors, and rule based workflows that move a loan from application to closing without five different teams rechecking the same file. That is why modern lenders increasingly buy a core platform and then plug in specialized tools around it.
-
The old mortgage LOS was built around a human working a loan file. Vesta describes breaking that file into smaller tasks and rules so software can assign work, call external systems, and keep the process moving. That is what it means in practice for a lender to operate more like a tech company.
-
Digital native lenders set the performance bar for everyone else. Better built around an engineering led model, funded loans entirely online, launched One Day Mortgage in 2023, and says it has funded more than $100B of mortgage volume through its AI platform. That makes speed and automation table stakes for incumbents.
-
This does not mean every lender builds everything in house. The market is fragmenting into core systems and specialist tools. Vesta positions itself as the system of record, while companies like Snapdocs automate a specific workflow such as closing. Lenders increasingly want to assemble that stack themselves instead of taking one bundled platform.
The next step is that mortgage software starts to look more like modern banking software, with a core workflow engine in the middle and many connected products around it. The lenders that win will be the ones that can keep swapping in better pricing, verification, closing, and servicing tools without rebuilding their entire operation each time.