PERSON OF THE WEEK: How did mortgage banking ever exist without cutting-edge computer technology? Well, of course, it did for many decades – the real question is how the industry can move forward amid the clutter of high-tech tools. To help figure out a solution, MortgageOrb spoke with Kelli Himebaugh, corporate vice president at Mortgage Builder Software, a Southfield, Mich.-based provider of loan origination and loan servicing software solutions.
Q: How has cloud computing changed loan origination? Are lenders paying more or less for loan origination system (LOS) services because of it?
Himebaugh: Alternatives to traditional software hosting have made a great difference in loan origination. More sophistication is available now, thanks to cloud computing, and costs have been significantly reduced for originators.Â
With LOS providers taking on the expensive tasks of maintaining compliant facilities and keeping software current in a centralized environment, lenders can reduce or redeploy IT people to other tasks. Research and development costs are more distributed for LOS providers, leading to increased feature arrays and improved user experiences that are more automated and customized.Â
Lenders are now able to have both end-to-end and best of breed LOS platforms without having to pay for separate components and running the risk of incompatibilities that so often come with bolted-together solutions. In addition, all these improvements come with variable cost structures, allowing lenders to pay by the loan without having to budget for big platform purchases. Software as a Service (SaaS) and cloud computing have been revolutionary, bringing regional and mid-tier lenders software sophistication they might not have been able to afforded prior to Internet delivery models.
Q: How do you see the role of mobile devices evolving for lenders? How will they make a competitive difference?
Himebaugh: Mobile devices are a game changer in several ways. With cloud services, field originators can do pretty much anything from an iPad that they previously needed a workstation for, and that means a tremendous lift in service levels and efficiency.Â
Loan officers can be out in the field with clients and borrowers more, with less downtime in the office and fewer distractions from their primary mission.Â Business development tools, customer relations management capabilities and product and pricing engines available from the LOS can be accessed via the devices, essentially putting the power of a mainframe in a tiny portable package. Lenders that embrace these devices and encourage their use in the field have an immediate competitive advantage over those that do not.Â They can also expect to attract the most talented loan officers.
Other essential services, such as those provided by inspectors and appraisers, are also more readily available thanks to mobile devices. We are evolving to the point where virtually all aspects of the origination process will be mobile and digitally available for everyone. We have come a long, long way from pagers and fax machines.
Q: What should lenders look for when they consider loan servicing technology alternatives?
Himebaugh: With more lenders joining the ranks of servicers, there are lots of questions needing answers relating to servicing technology. They are not typically huge lenders with unlimited budgets, so a careful due-diligence process is paramount.
Among the first things they should look for is synergy with the origination system they are using. Can they talk to each other? Are there intermediary translation steps required for one system to interface cleanly with the other? It is all too frequent for servicers to have to go through expensive processes in order to match data from origination systems with the field data requirements of the servicing system when boarding loans.Â
Q: What do you expect the Uniform Loan Delivery Dataset (ULDD) will mean for lenders and the mortgage industry as a whole?
Himebaugh: The ULDD has broad implications for the future of the mortgage industry. It puts mortgage data into a common language that allows almost unlimited analysis, and that is good for investors.Â
When the private secondary market comes back, investors will be more comfortable with the underlying loans in the pools or securities they purchase. They will take a more proactive role in analyzing the data in each loan file and matching it against a variety of databases that can reveal problems before they buy. With the ULDD, they are not taking someone else's word for the information contained in the loan file; they are actually looking at the data that makes up the loan, and that brings integrity to each transaction.
The ULDD formalizes the digital, virtually paperless loan – something that the LOS industry made possible years ago. With that loop closed, the industry removes the inaccuracies and vulnerabilities of paper files and replaces them with digital precision. It is the closest we have ever been to full data integrity, and though it is still not perfect, it is a very positive start to bringing private capital back to the mortgage business.