PERSON OF THE WEEK: Flexibility, configurability and scalability continue to be key attributes of the software and systems that mortgage lenders rely on to originate loans. The challenge lies in selecting software that offers the capabilities and features that best meet the current and future needs of the organization. As the mortgage market shifts and changes – for example, currently the industry is facing a major shift to a purchase market, declining volume, and the potential for regulatory rollback – so, too, must the software and systems used by mortgage lenders.
So, what are mortgage software makers doing to ensure that their products deliver the right mix of features, capabilities, configurability and scalability? Mortgage origination software firm LendingQB has taken a unique path in developing what it calls a “modular” approach. To learn more about how this “modular” approach is different compared with other origination platforms – and the advantages it brings for lenders – MortgageOrb recently interviewed David Colwell, vice president of strategy.
Q: Digital lending has garnered a lot of attention this year. As it isn’t new, why do you think its resonating with lenders at the moment, and how receptive have lenders been to adopting new technology to drive digital lending?
Colwell: Although it’s true that the technology to enable digital lending has existed in some form for the past 20 years, the difference today is a more widespread acceptance of digital transactions in all industries and a mobile-first computing environment that lends itself to moving away from paper.
Today, we are seeing increased confidence in the economy, the technology is readily available and user-friendly, and the regulatory environment, while ever changing, looks to be a bit more predictable. Pair this with the fact that the loan origination system (LOS) has become the command center for the origination process, and lenders are ready to integrate systems that will move their organizations toward a true digital lending experience.
Once adopted, lenders are finding new technologies to provide upwards of 20% more volume of loans been processed and 55% to 60% of a month’s workload being complete by the 15th of each month.
Q: Amidst the ever-growing number of technological solutions on the market, what should lenders look for in their technology as they move toward true digital lending?
Colwell: The top priority lenders should look for is technology that can grow and adapt as the lender’s business grows and changes. Due to the rapid adoption of new technologies, lenders need platforms that can accommodate these changes. Likewise, the technology has to be applicable to the use of several different internal audiences.
Take the LOS, for example. The demands of a loan officer working with an applicant are different from the compliance staff, which is different from the secondary marketing staff. The technology must be able to meet these needs. As the mortgage industry becomes more data-driven, lenders can benefit from leveraging a more “modular” approach to their LOS. This way all audiences are performing their roles without causing delay or having to create manual workarounds.
Q: What exactly is a “modular” approach?
Colwell: A modular approach, or modularity, refers to the development of role-specific modules of the LOS that provide a specific user interface and workflow environment for each type of user, such as loan officers, processors, underwriters, etc. These individual modules reside on top of a centralized database with a core set of functions ensuring all users maintain strict data integrity and have access to a uniform set of tools.
For example, a loan officer would have an originator-specific module built with only the fields and functions that are needed for working with the borrower. This would include loan applications, digital point of sale tools and customer relationship tools and data verification services.
Q: Where do you see the industry heading in the next few years?
Colwell: We can expect to see the continued adoption of technology to drive digital lending. As digital platform adoption continues to grow among millennials and now Generation Z, lenders are going to have to engage with these future borrowers in a digital-first manner at a moment’s notice. To do so, the ability to engage new borrowers at a moment’s notice will be vital, and can be achieved through the digital and mobile channels.
This digital-first economy will not only streamline the process for borrowers, but will help lenders reach faster origination and reduce the cost via innovations such as the modularity model. The industry continues to reshape itself at a fast pace, and technology will continue to be the foundation upon which innovation takes root.
