Matthew Wood: Today’s LOS Must Be Designed with Future Technologies in Mind


PERSON OF THE WEEK: The mortgage market is, unfortunately, set for another slowdown, but that means mortgage lenders have more time to focus on refining the technology and processes they use to improve the experience for their borrowers.

As lenders look to improve their systems, they will no doubt ask, “What are the latest developments in LOS technology?” Very often, only those LOS providers who continuously innovate will have a meaningful answer to this question.

So what will the LOS of the future look like? And what innovative features might it sport? To find out, MortgageOrb recently interviewed Matthew Wood, senior director, consumer lending, for TAVANT.

Q: In your opinion, what makes an LOS stand out as truly innovative?

Wood: Investing in the right mortgage loan origination system is a vital and challenging decision for mortgage lenders. To be truly innovative, the core loan origination platform must incorporate the incremental gains of today’s digital and data journeys. To be truly impactful, the loan creation ecosystem, within and without the platform, must be designed to naturally open towards the presence and power of emerging crypto/ deep transfer learning (DTL)/ blockchain/ artificial intelligence (AI)/ machine learning (ML) technologies.

The all-too-common measure of a successful LOS is usually a question of if it is scaled to handle greater production volumes. For many years success was not measured necessarily by any sizable per unit efficiency gain. Fortunately, this trend is reversing, yet the overarching success of a value creation platform, like a LOS, is more profound if it can generate traditional top line benefits like scale, combined with product reach, novel forms of quality, conversion improvement, etc.

To put it more directly, an innovative LOS is multifaceted and well-footed for the future when it includes speedy deployment that blends seamlessly with one’s existing systems and workflows, versatile features that improve decisioning and daily operations, and a future-proof design that will evolve and expand alongside one’s organization.

What’s more, vendors should also be innovators. A vendor that is innovative is one that truly listens to customer concerns. Customers often have beneficial feedback on issues they face today, sparking insightful ideas to enhance systems and develop new products which vendors need to act on. As the industry moves closer to achieving a true end-to-end, fully paperless e-mortgage process, it will need the right LOS to help enable it.

Q: When it comes to the technology investments for lenders, what’s next? What does it mean to successfully pivot at a time when things are rapidly changing in the mortgage industry?

Wood: The pandemic has permanently changed the way consumers use technology. Those looking to buy or refinance a home are seeking lenders who offer the online tools to complete their mortgage loans from home. Investors looking for opportunities to continue improving the borrower experience in this quickly-shifting landscape will need to understand the latest changes in the industry, which parts of the mortgage process can be further improved, and the next potential innovations. 

The mortgage industry has continued to adopt technology to streamline the process of getting a mortgage, with the aim of making the consumer experience smoother and faster. Rather than relying solely on a core loan platform, combining multiple third-party technology components may be valuable.

Lenders will continue to spend on mortgage technology, and technology-driven innovation will seep further into core platforms and back-end technology. Given the industry-wide demand to provide a superior customer experience and to create long-term efficiencies, several innovative mortgage-product offerings and technology solutions are expected to emerge.

Q: What can independent mortgage banks do to stay competitive and be successful in 2023?

Wood: More efficient technology and a rise in new kinds of lenders are creating opportunities for investors. Software solutions such as front-end platform modernization, workflow management, document extraction and management, third party data verification, appraisal management, e-closings, automated compliance, and decisioning are designed to speed up the mortgage-application process, lower costs for the lender, and improve the overall customer experience. Failure to update legacy processes can result in lenders not being able to automate front-to-back processes. 

To compete, independent mortgage banks may need to completely and permanently shift the way they serve borrowers as well as invest heavily in digitized interfaces that make submitting an application, uploading documentation, and communicating with the lender easier. Enhancing the consumer experience must be a top priority. Lending needs to be made as easy as possible by offering consumers the tools they demand and expect.

Q: If you could go back in time, what would you tell your pre-COVID self? 

Wood: That the technology advancements the industry has been discussing for decades, and the promises of faster, more efficient processes, will finally become a reality.

I think most industry professionals will acknowledge the mortgage industry has traditionally been extremely slow to embrace change and even slower to adopt newer, more modern technology solutions. This mindset seemingly changed overnight.

The pandemic significantly accelerated technical change and forced companies to provide tools and services in a virtual environment, to automate processes and leverage digital platforms to engage consumers.

It is such an interesting time in the industry to finally see the promises of digital – improved workflows; faster, more accurate processing; reduced costs; and an enhanced overall customer experience – finally coming to fruition. 

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