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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2012

4 Winning Tech Traits

Learn from elite athletes when shopping for technology vendors

4 Winning Tech Traits

Various sporting events often have been used as analogies for teaching lessons about hard work and dedication. And, with the Olympics coming to an end just a few months ago, it seems appropriate to consider what lessons we can learn from these athletes and how those lessons can be applied to the mortgage industry.

More specifically, mortgage bankers and lenders may discover that Olympic-level athletes and quality mortgage technology vendors share more in common than some may initially think. Although the industry has changed significantly in the past few years, there are numerous traits that always will be important for technology vendors and their products to have, and bankers and lenders should know those qualities well.

Consider the following four traits when your company is in the market for new vendors and technology.

1. Flexibility

From gymnastics to track and field, almost every Olympic sport highlights flexibility in some way, a skill that athletes acquire through years of work and conditioning. Although flexibility is necessary for athletes to excel in their sports, flexibility is equally important for lenders and the technologies they use.

For the uninitiated, it may appear that each lender uses the same processes — and, in essence, they do. Those in the industry, however, recognize that it’s the idiosyncrasies that make each company unique — like varying borrower demographics, loan types and secondary market trading partners. Considering this, it’s crucial that the technology your bank or institution uses is flexible enough to accommodate your unique business and workflow needs.

This flexibility can take form in a variety of ways, but most often includes:

  • Open networks: A vendor-agnostic network ensures that a lender can work with its chosen service and solution providers and can change providers without having to reconfigure its entire process. The alternative is a closed network in which the vendor tells the lender with whom it can work, forcing the lender to limit its solutions.
  • Custom configuration: Technology that has a common code-base and can be configured to meet a lender’s specific needs can help speed up implementation while offering custom workflow. Banks and lenders should know that, in comparison, so-called customizable technology requires lender-specific code writing that can be difficult to maintain and ultimately delay a technology from going live. The main difference between configuration and customization is the time required by a lender’s staff to manage each method.
  • Variable models: Technology that’s built on a pay-as-you-go model ensures that a lender’s overhead costs will ebb and flow with market conditions. If locked into a fixed-fee model, a lender must commit to spending the same amount of money regardless of how its business is performing. Considering that, variable-cost models can help lenders better brace themselves for industry changes.

When researching any piece of mortgage technology, it’s crucial to account for near-term requirements and long-term goals. With that in mind, flexibility should be at the forefront of any decisionmaking process.

2. Specialization

When you think of the world’s best athletes, you typically associate them with one sport. Although the techniques an athlete has perfected may translate from one sport to the next, it’s often the case that athletes are most successful when their specialties are narrowly defined.

The same can be said for lending technology. Although some vendors claim to offer end-to-end services, it’s frequently the case that utilizing best-of-breed technologies together can produce better results. Although phrases like “supporting a loan’s entire life-cycle” and “end-to-end” tend to be used interchangeably, there are distinct differences when applied to the mortgage industry, and it’s crucial to be aware of these differences.

In brief, an end-to-end solution provider will attempt to offer solutions from origination through closing, although providers that say they “support a loan’s entire lifecycle” usually mean that their solutions can be integrated with other best-of-breed providers from origination to closing to servicing. And, again, it’s often the case that best-of-breed providers can offer superior service in their particular specialties, service that can be used in tandem with other best-of-breed providers, as well.

Like a relay team being able to complete a race more quickly than a single individual, combining best-of-breed technologies can help lenders benefit from faster, more efficient processes at every point of a loan’s lifecycle.

3. Dedication

Olympic athletes don’t merely practice their sports; with unrelenting dedication, they practice specific aspects of their sports that require improvement and constantly look to experts for advice on how to strengthen their performance.

Every entity within the mortgage industry should employ this brand of deliberate, dedicated practice. In addition to our everyday activities, mortgage organizations of every kind should be prepared for possible bumps in the road — preparation that’s especially vital for technology vendors. From the ability to handle exception management to working with different loan types and having an extensive network of industry vendors for collaboration, quality vendors should be constantly working to develop solutions for their customers’ problems.

For instance, what if a lender who uses an eDisclosure technology encounters a borrower who doesn’t have an e-mail address or can’t take certain actions in the predefined amount of time? That lender should be able to rest assured, knowing that its chosen technology solutions can handle and track exceptions of any kind, however specific. Only when a vendor is focused on continuous improvement will the solution truly meet lenders’ needs and provide the necessary reliability.

4. Teamwork

Even as Olympic athletes compete to beat their events’ best times, they’re also aiming for a larger goal: to bolster the success of their teams and, even more, the success of their entire countries. The value of collaboration is one of the most significant lessons that the mortgage industry can learn from the Olympics.

The mortgage process, after all, is a kind of relay, and as is the case in an athletic competition, perhaps the most important aspect of this relay is communication. This includes not only talking to your teammates but also supporting their efforts. If one process has a stumbling block, it can affect a transaction’s overall turn time.
When it comes to mortgage technology and teamwork, changing industry dynamics and compliance requirements necessitate open and transparent communication. This can be achieved by integrating disparate systems through an intelligent, collaborative network that supports multi-tier security models, detailed audit trails and easy accessibility to loan files.

In addition, in an effort to support each other, the industry needs to be cognizant of downstream requirements and adhere to them throughout each step of the loan process. For example, many investors don’t accept locked PDF documents. When delivering electronic documents into a loan folder, therefore, steps must be taken to ensure that the files aren’t locked — and, if they are, the vendors delivering those locked documents should consider alternative approaches to securing their information.

•  •  •

The mortgage industry is changing at an outstanding rate, making it critical for lenders and vendors to take a closer look at their processes and define strategic plans for the future. For many, this plan will include an increased emphasis on technology to improve efficiencies and simplify processes. Remembering some of the commonalities between our industry and world-class athletes can provide a guide when evaluating your next technology decision.


 


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