Market Analysis: A New LOS Player Enters The Space

*A New LOS Player Enters The Space*
**By Tony Garritano**

***The past two weeks have seen a whirlwind of activity on the loan origination side of the business. We broke the news that Canadian firm D+H acquired LOS Avista and yesterday we broke the news that LOS Mortgage Builder acquired servicing mainstay GCC. It’s been a lot to take in. Well, today there’s more news to digest. I told you last week that I would tell you about some exclusive news from Genpact when it was ready. Well, it’s ready. Here’s the scoop:

****As a recap, we broke the news last week that Genpact Limited, a business process and technology management provider, released virtual correspondent and private-label origination applications for its Quantum Mortgage Operating System (MOS). The applications are leveraged with Genpact’s Mortgage Business Process as a Service offering (BPaaS), which combines the technology with Genpact’s business process services, data analytics and mortgage domain expertise.

****The virtual correspondent and private label applications combine Quantum MOS’ data-centric loan automation platform with Genpact Mortgage Services’ BPaaS offering to increase effectiveness and reduce the loan cycle time by as much as 30%. The applications can be set up in either a delegated or non-delegated model, enabling users to customize the workflow to best suit the needs of each lender.

****Today Genpact is launching a new LOS. Why does the industry need another LOS? This LOS takes a new approach to mortgage lending, and let’s face it, a new approach is need. This solution takes a page from Apple and iTunes. How? It offers what can be best described as apps. There is an origination, processing, underwriting, closing, shipping and secondary app. This gives the lender the ability to use all the apps and implement a new end-to-end LOS or just implement certain apps that solve isolated issues. This approach also enables the lender to avoid a long, expensive, implementation of a new system whereby they have to rip out their old system and put in a new one. Because of this app approach, over time the lender can migrate to a new LOS by implementing one app at a time on top of its existing system until the full LOS is implemented. Once the full LOS is implemented you just turn off the old system instead of ripping it out and undergoing a period of painful transition.

****However, in my mind, the biggest differentiator is the core philosophy behind everything Genpact is trying to do. I’ve been talking about things like e-mortgages for years. What Genpact does with this new LOS is make larger concepts like the e-mortgage attainable. As investors and regulators look for more transparency and data over forms, this new LOS is ready to meet that challenge because it was built with a data-centric approach to mortgage lending from the ground up. Once an application is entered into a system, that data should be instantaneously available at every step of the loan process. For example, underwriters should be able to evaluate the AU results and apply risk decisions based on trusted data, not error-prone forms. In my mind, that’s what makes this new system unique. Going forward, I’ll keep you updated on its progress and industry acceptance.