As published in Scotsman Guide's Residential Edition, February 2012.
There are still professionals working in the mortgage industry who remember taking applications with a pencil and a sheet of paper. The industry is certainly lucky to have the technology it has today, but that doesn’t mean that your loan-origination system (LOS) is as powerful a point-of-sale technology as it once was — a reality that may have been disguised until recently by high loan volumes.
Now that good deals are at a premium, more originators are realizing that they have to make better decisions at the point-of-sale if they hope to preserve the resources that they need in order to effectively compete. Nobody can afford to waste time on deals that will never get past the underwriter.
During the days of the refinance boom, the point-of-sale was whenever the loan office collected the information for a given application. Many businesses operated almost as if they had no underwriter — who needs a staff of underwriters if you’re simply going to sell the loan to another company that’s already provided a technology that determines whether or not they’ll buy?
Of course, this kind of thinking proved to be problematic for the industry. With that in mind, mortgage professionals need to consider what new technologies they need in order to compete in today’s origination business. In short, what originators need now is technology that allows them to be smarter about managing deals that don’t make it into their pipeline right away.
Managing the point-of-sale is where today’s LOS technology falls short. Originators can no longer think of the point-of-sale as the moment when the borrower signs the application. Instead, the point-of-sale must include the whole process that happens with prospects before they sign, both those who don’t yet qualify and those who do qualify but haven’t seen a deal worth signing.
One of the great things about today’s LOS technology is that it’s adept at working with third-party systems that perform other tasks. This makes it easy to couple a LOS piece of technology with other systems that can, when combined, make originators’ business more efficient and productive. Consider, for instance, a few functionalities that might prove useful on the front end of a LOS:
A system that schedules task reminders in order to help loan officers reach potential buyers and prevent prospects from falling through the cracks.
A tool that allows officers to immediately connect with a lead, thus giving them the chance to build a client relationship before their competition does. This tool might send only viable leads to the LOS while storing all potential leads in a centralized location. By centralizing leads in this manner, managers could determine the best officers to work with them while originators continue to market and re-market leads not yet ready for the LOS.
A functionality that offers borrowers a customized search page that provides personalized quotes. The ideal platform for this tool would streamline a company’s mortgage origination department. It would tie together product and pricing searches, secondary lock desk management, lead communication, lead marketing and other critical technologies such as LOS communication, automated underwriting and mortgage locking.
Originators who will succeed tomorrow know that the LOS of today may be a good tool for originating loans yet may not be a complete solution for loan officers. Today’s origination technology doesn’t typically include features specifically created to enhance originators’ lending success. Even so, originators shouldn’t have to completely rebuild their LOS in order to allow it to be as useful as they need it to be.
Don Kracl is the founder and president of Mortech and the mortgage technology visionary behind the MarksmanLMP Lending Management Platform.
He has worked to make mortgage lending easier for the industry and homeowners for more than 30 years. Reach him at email@example.com.