I had a conversation with a bank executive the other day, one of our new 2008 customers. He was telling me about the socialization of change within the organization. The executive chuckled, and pointed out that the new Mortgage 2.0 processes they were putting into place created very different reactions amongst their staff members, depending on how each person perceived the way they did things before. But that this was precisely the point – the old way allowed each officer to process loans differently, resulting in inconsistencies and errors. And now? “Every single one of our loans coming through the pipe is totally clean. Not one has a problem.”

So I guess the question is, what is the next Big Thing for the industry? Is it more volume or better loans? Most, inside and outside the industry, will say that the cart has been in front of the horse for too long. Volume must come AFTER the industry can accurately (and inexpensively) provide better loans.

As I mentioned in my last entry, 2009 is the Year of Mortgage 2.0. And in Mortgage 2.0, accountability will be key and holistic. By holistic I mean that the market and the greater market surrounding it must remove or at least soften the impact of the single individual. Mortgage 2.0 is about making it nearly impossible to do anything outside of a transparent, collaborative environment.

One way to create standards is to only sell FHA loans, i.e. making it error-proof. Another way is to get rid of the wholesale channel, i.e. sell through a channel with more control. But both of those attempts at accountability also remove competitiveness. The third way — the most sensible way — is through Mortgage 2.0 and the underlying technology and processes that embrace it.

Remember the lack of accountability there used to be when you bought a paper airline ticket from a travel agent? That paradigm went away when internet reservations took off, driven by the needs of a more competitive and global travel industry, and enabled by companies like Sabre and Worldspan. From my experience in the field, I see clearly that Mortgage 2.0 and the age of Internet-enabled loan processing has arrived, and with it, a new age of accountability in the mortgage industry. When both volume and better loans will be the standard.