More Technology Successes

*More Technology Successes*
**By Tony Garritano**

***Yesterday I told you about a lender that had a great deal of success with a new LOS. Today I’m going to tell you about the other side of that coin. I got information from LOS vendor Ellie Mae in which they released the findings from a new commissioned study conducted by Forrester Consulting on the total economic impact that lenders may realize by using the Company’s Encompass360 mortgage management software system. Here’s what the study found:

****Forrester Consulting’s analysis showed that a lender funding approximately $1 billion annually and using Encompass360 and Success-Based Pricing could:

****>> See a return on investment of 57% over three years;

****>> Receive total benefits of $2,679,000 over three years vs. total costs of $1,702,170;

****>> Break even in as short as 2.9 months on a risk-adjusted, cash-flow basis; and

****>> Receive an average benefit per loan of $232.

****Forrester Consulting arrived at this conclusion after interviewing four existing Encompass360 clients, who were representative of the profile of Ellie Mae’s user base, and then developing a composite company to illustrate quantifiable costs and benefits.

****The research company then evaluated the benefits, such as improved compliance and increased staff efficiency, as well as the costs of using Encompass360. Cost elements included software licensing, self-hosting, internal labor and training.

****This study was commissioned by Ellie Mae, and Ellie Mae identified the clients who were interviewed by Forrester Consulting, which does taint the results in favor of the LOS vendor for sure. Although Ellie Mae was able to review and provide feedback on the study, Forrester Consulting maintained editorial control over the study and its findings. Forrester Consulting and Ellie Mae make no assumptions as to the potential ROI that other organizations will receive.

****“All loan origination system developers talk about ROI, but we decided to quantify it,” said Jonathan Corr, chief operating officer of Ellie Mae. “While total economic impact analyses are common in the enterprise software space, this was the first one that Forrester has ever conducted in the mortgage market. The findings support what our clients have been telling us: Encompass360 and Success-Based Pricing can help deliver a quick and significant economic improvement over licensed, self-hosted models, improve productivity, back stop compliance and pay for themselves in a matter of months.”

****How do these results compare to the ROI gained by using competing LOS systems? I don’t know, but if you’re an LOS with similar numbers to share let me know. The point that I’m trying to make by sharing this story with you is that technology can make a huge difference, so lenders need to automate.

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at