As we reflect on Freddie Mac’s 50 years of helping families and communities realize sustainable homeownership, we sat down with three experts to better understand the forces and trends that have shaped the mortgage industry throughout the years.

One key insight emerged: Disruption and crises foster innovation and change.

Borrowers, homeowners, lenders and other housing and mortgage professionals have experienced the industry during good times and bad.

In this challenging time, we asked our experts what has been the most significant catalyst for change in the mortgage industry?

The needs of lenders and originators often drive change and innovation in our industry. The lenders’ needs are often a function of borrower demands. New tools, technology and innovation are there to help lenders reduce costs, which are passed down to borrowers. Many of our initiatives, from early versions of automated underwriting systems (AUS) to today’s automated collateral evaluation appraisal waiver, are geared toward providing services to the lenders to help them be more efficient.

One driving force behind some of these shifts is the recent mortgage crisis in 2008. I think it was a wakeup call for the industry. While unfortunate, it helped spur a positive change and better acceptance of data and automation to make unbiased, better risk decisions than the traditional manual process.

Crises cause changes. Early in my career I went through the “thrift” [savings and loans] crisis, the effects of which helped the industry tackle how to better manage interest rate exposure. The Great Recession brought into focus the need to find better appraisal and underwriting processes.

I think the current pandemic has moved us forward in our digital journey by five years. In a few weeks since mandated shutdowns, we’ve found options for closing on a property when you can’t go to a title company’s office and/or get appraisals without stepping into peoples’ homes.

The reality is that the greatest catalyst for change are those events that dislocate markets and cause disruption. Certainly, the housing crisis of 2008 exposed a lot of issues across the entire industry. Potential solutions to this come down to data, technology and information—informed decision making.

Fortunately, the GSEs and the industry overall realized this and we now have better practices and better standards. The Uniform Mortgage Data Program is a great example of that. The use of that data in the structure and development of advanced automated underwriting systems provide us with better data sets. This allows us to better understand risk, collateral and other components. Additionally, with disruption often comes better thinking, better management and better responses to future potential