Daniel Crooke: APIs Play Vital Role in Mortgage Software Ecosystem


PERSON OF THE WEEK: Application programming interfaces (APIs) are software-to-software interfaces that enable applications to easily communicate back and forth without the need for direct user intervention.

APIs have been in use since the late 1960s, but the power and design behind them increased in complexity beginning with the tech boom of the early 2000s. Around that time, companies such as Salesforce, eBay and Amazon launched API capabilities to interface with other tools needed to expand their reach. APIs have become so ubiquitous that many users have no idea that many popular apps, such as Google Maps, are API-driven to combine several important functions into one useable interface. 

APIs are quickly becoming a vital tool for mortgage lenders. According to a recent Fannie Mae survey, mortgage lenders view APIs as one of the top two technologies with the greatest potential to help improve or streamline processes. To learn more about how APIs are playing a critical role in there mortgage origination software ecosystem, MortgageOrb recently interviewed Daniel Crooke, API specialist with mortgage software firm FICS. 

Q: How do APIs function?

Crooke: An API is essentially a set of rules that define how applications can communicate. These interfaces hold specific information that lenders need and move it back and forth to different platforms, thus minimizing human intervention. While the human touch is imperative in many parts of the mortgage process, using APIs to automate key functions vastly reduces the chance of mistakes by maintaining a single data source and reducing manual data entry. 

Something as routine as using your fingerprint or face as a security protocol in an application on your phone is done through an API. In this specific case, the application uses an API to communicate with the operating system to access the hardware used to capture the fingerprint or photograph and validate the user information. In the mortgage industry, an API could be used to create a connection between a scheduling tool and mortgage servicing software, allowing servicing tasks such as end-of-day processes to be automated. 

Q: What are the benefits of APIs? 

Crooke: APIs offer convenience and time savings via workflow automation. Mortgage servicers can use APIs to automate reports and programs, thus saving time and resources, eliminating after-hours and weekend work, and reducing mistakes caused by human error. APIs enable secure connections between loan origination and servicing software, core systems, credit bureaus and government sponsored enterprises, eliminating the need for manually inputting data in each system. 

APIs can be used both internally and externally to streamline information transfers. An internal API may help to simplify origination or servicing, while an external API allows borrowers to obtain or submit information. Mortgage servicing software APIs that automate end-of-day processes are internal APIs. Borrower-facing web applications, that allow borrowers to view their mortgage information or make online payments, are external APIs. 

In the case of mortgage servicing software, APIs are commonly used in conjunction with scheduling tools in order to automate the execution of mortgage servicing tasks, such as end-of-day and end-of-month reports, investor close out, monthly loan statements and custom programs such as core interfaces. The API should have the ability to notify IT staff of the successful execution of the task after it is completed.

Q: How can APIs help mortgage professionals working remotely?

Crooke: One of the biggest challenges lenders have faced because of the COVID-19 pandemic is the increase in remote workers. By using APIs, employees can greatly reduce the amount of interaction required in a system. 

Rather than needing to access a remote server or log into a specific remote program, lenders can use an API to automatically send email reports with attachments to phones or inboxes, eliminating the need to tap into another machine to run and verify results. This saves time and increases accuracy, helping remote employees work more efficiently and effectively. 

Q: Can multiple APIs be used together? 

Crooke: Yes, APIs can be used together to retrieve data that will in turn be used in another API. A borrower can apply and upload supporting documentation via a borrower-facing API. A second internal API may then be used to automatically review the application or transcribe the information between an origination and servicing platform before communicating an update back to the borrower. 

Chaining multiple APIs together can create a streamlined workflow that connects the point of sale (POS), the core system, and the loan origination and servicing software. Together, these communications promote maximum efficiency and data integrity across the mortgage process.

Q: How can a loan servicing API be used with a core banking system? 

Crooke: The mortgage servicing software and core banking system create data files that can be transferred in lieu of a direct connection. This allows tasks to be initiated remotely via APIs that enable a scheduling tool or application to exchange data seamlessly, rather than being run manually. 

Interfacing with a core system is critical because while core systems support many products, mortgage servicing functionality is often limited or subpar. Core systems inevitably require staff to perform many manual tasks due to limitations within the core. Mortgage servicing software and APIs can automate those manual processes, streamlining everything from customer-focused tasks to investor reporting.

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