Grabbing the Borrower’s Business

By Mark Phlieger

Can you afford to give up business? Can you afford to be lax? I don’t think so. None of us can. It’s a tough market. As such, you need to go to the borrower because they won’t always come to you. How do you do that? You perfect your consumer-facing approach.

We saw opportunity here to perfect our technology to help lenders do just that. We wanted to take our consumer direct website to the next level. The goal was to make it adaptive and dynamic. This piece sits right on our LOS and because it does not rely on a manual file export of 1003 data to update the LOS, we are able to capture far more fields of borrower data and truly collaborate with the borrower. All that data flows back and forth seamlessly. We also have online e-signing and disclosures through DocMagic. Here’s how it works and here’s how you can better grab a borrower’s business:

In the end, the consumer wants an interface that’s easy to use. They also want some education online. They want to be informed. Gone are the days of the borrower just signing on the dotted line.

They also want that all-important online approval. They don’t want to start online and have to finish over the phone or through paper. From there, they want to e-sign documents, see the status of the loan and collaborate with the loan officer. They basically want it all. We built our first consumer site back in 2001. Earlier this year, we rewrote that initial offering using technologies like .NET and Ajax. You see some of the competing vendors using older technology, but I think it’s important to use the latest technology.

We also wanted to give the lender the flexibility to update their own content. For example, we have a client that’s doing several hundred child sites off of our technology to better connect with their credit union partners, so configurability is important.  Over 90% of our clients are rolling out with a consumer site.

What does this all mean for you going forward? You have to be out there at the point-of-sale. If you want to drive leads you have to have a solid presence at the start of the process. You can’t get there by hanging a consumer direct only portal onto a legacy LOS, outsourcing the front end to one company and the back end to another provider; it has to be a part of your core system. From a pricing model, we offer our consumer direct website based on a closed loan pricing model. Some company’s charge based on loan applications.  With a consumer direct website how do you know how many prospects will show up at your door and with an unknown closed loan ratio? It’s like a fire hose without a shut-off valve.  Good for the vendor, bad for the lender.

Also remember that this technology can come together to give you a real, tangible competitive edge. We at Avista serve the community and regional banks, credit unions, and mortgage bankers. A product like this puts them on a level playing field vs. the larger players. This helps the local lending institutions defend their turf.

Remember, the mortgage application has more customer data vs. any other form. You want to keep that application in your shop; you don’t want it shopped around. How do you do that? Go to the borrower and make it easy for them to transact with you all online.

A longtime leader and technologist for the mortgage lending industry, Mark Phlieger is president and CEO of Avista Solutions, the Charleston, South Carolina- based creator of innovative all-channel, Web-based loan origination systems.  Co-founding the company in 2001, Mark has led Avista since its inception and has an impressive record of achievement in pioneering and development in the mortgage technology space. Mark was a team member on the Fannie Mae project that developed the groundbreaking technologies of Desktop Underwriter and Desktop Originator and later became responsible for their implementation and adoption as the industry standard among Fannie Mae lenders.  He went on to create Resource Bancshares Mortgage Group’s core Web-based e-business platform, e-RBMG.

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The Truth About Imaging

By Mark Phlieger

As an LOS, we are the system of record. Much is expected of us. Lenders depend on us. Therefore, we have an obligation to deliver intelligent solutions in order to make it easier for our lender clients to originate a loan. That’s our mission.

One way to do just that is to keep up with the latest technology to ensure that our clients benefit from the largest efficiency gains possible. That is why we looked at and incorporated imaging into our system over five years ago. We wanted to allow customers to go paperless. We chose to implement imaging in 2005 and today over 83% of our customers are using imaging to streamline their business.  Why should anyone chase paper – when technology allows for automate and efficiency? The other benefit to adopting imaging is the collaboration that happens.  Remote underwriting is now a reality, allowing customers to hire the best underwriters without location concerns. We’ve had customers tell us that they caught fraud using imaging that they would not have been able to do with paper. Imaging now has to go even further.

Imaging has become an integral element in the mortgage market. In the last three to five years it has been the standard way of doing business, period. If you listen to the customer, they’ll tell you that they don’t have any paper anymore. The next evolution of imaging is to make it even more lights out. Nobody is talking about going back to paper and rightfully so.

Lights out for me means tighter integration. We spend a lot of time educating clients about the difference between uploading PDFs and imaging. Uploading PDFs is not imaging. Why? As a lender, you need to splice documents, flip documents, annotate documents, etc. That’s real imaging. It’s not just about uploading a PDF and any vendor that calls uploading a PDF imaging can’t do real imaging.

We have made great strides with imaging over the last five years. The imaged file has become much more personalized for users, allowing custom settings for upload and viewing options based around loan status. Barcoding of documents allows for further automation; freeing up human resources for redeployment.  What used to take a person fifteen minutes; can now take under a minute.  Underwriting turn times have decreased as intelligent notifications provide users with real time updates about the information available in a file.

True imaging systems listen and adapt to the real life scenarios our customs encounter on a daily basis. A true imaging system allows each user to have a unique experience with their imaged files.  Originators can have simple upload and view options; underwriters can have files organized to meet their needs and detailed annotations; shippers can eliminate manual checklists and each group can be presented with files that make sense for their function in the loan process.  Imaging systems not only reduce the tangible paper, toner and mailing costs, but also greatly reduce intangible costs such as time, human error, and investor stipulations.  Secure logins to imaging solutions help reduce risk of information exposure and provide smarter and less expensive disaster recovery plans.

We do e-stacking and document recognition already.  All of our imaging is embedded directly in the LOS, which makes access easy and secure. In order for imaging to be effective it has to be embedded in the LOS. We run into some clients that say they have imaging, but it’s so generic that it can’t recognize mortgage documents.  Stand-alone imaging vendors are familiar with the image world, but not the practical needs of mortgage customers. A truly successful imaging solution is driven by the unique needs of the mortgage business and works with an LOS to revolutionize process.

My final thought on true imaging is this: The imagining train left the station years ago. If you’re not doing it, you need to be. This is the way origination is done and that will continue to be the case. The next step is to move toward handling true data. We’ll get there.

A longtime leader and technologist for the mortgage lending industry, Mark Phlieger is president and CEO of Avista Solutions, the Charleston, South Carolina- based creator of innovative all-channel, Web-based loan origination systems.  Co-founding the company in 2001, Mark has led Avista since its inception and has an impressive record of achievement in pioneering and development in the mortgage technology space. Mark was a team member on the Fannie Mae project that developed the groundbreaking technologies of Desktop Underwriter and Desktop Originator and later became responsible for their implementation and adoption as the industry standard among Fannie Mae lenders.  He went on to create Resource Bancshares Mortgage Group’s core Web-based e-business platform, e-RBMG.

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Going Beyond The Buzz

By Mark Phlieger

These days we’re hearing a lot about the cloud computing model. I remember when the buzz was all about being Web-based. Today some vendors active in the mortgage market today have Web-based applications, Web-enabled applications, client server tools, Citrix-enabled tools, etc. In my view, none of the models mentioned go far enough.

If you’re trying to do enterprise-class lending with specialized products it seems to me that the cloud is the next evolution of mortgage technology. What do I mean? Let’s take a common example. When I get up in the morning I want to know the weather but I’d don’t want t click on the Weather Channel every morning, I just want to click a button and it comes up. There should be specialized setup just for you that filters out all the other noise. I think lenders want a similar setup in that specialized functions just come up. Here’s how lenders can get there.

In an article called “Distinguishing Cloud Computing from Utility Computing” by Krissi Danielson, it says, “Cloud computing is Internet-based computing, whereby shared resources, software and information are provided to computers and other devices on demand, like the electricity grid. Cloud computing is a paradigm shift following the shift from mainframe to client server in the early 1980s. Details are abstracted from the users, who no longer have need for expertise in, or control over, the technology infrastructure “in the cloud” that supports them.”

That’s the textbook definition of cloud computing. What does it mean to you as a user of this technology? The benefit of the cloud is the collaboration component. Your people should focus on what they do best, sourcing, processing and closing loans. The tools to enable them to execute those tasks should be immediate and on demand. That—as I see it—is the big benefit of the cloud.

Cloud is the next logical extension of Software as a Service. The user cares about the on-demand component of all these models. With ASP and SaaS there is still client interaction required that is just not required when you’re using cloud computing. With the cloud it is all at your fingertips. There are a lot of similarities because the customer doesn’t need hardware, you pay for what you use, we vendors lowered the implementation fee and lowered the time to entry. The vendor also does the research and development investment and not the user.

So, why is cloud computing so compelling? We want to provide a configurable solution that is totally on-demand. You can do that and much more when you’re on the cloud. Stay tuned to future editions of this column to get some more tips on how you can rethink originations to be better, faster, cheaper in a hyper competitive mortgage market.

A longtime leader and technologist for the mortgage lending industry, Mark Phlieger is president and CEO of Avista Solutions, the Charleston, South Carolina- based creator of innovative all-channel, Web-based loan origination systems.  Co-founding the company in 2001, Mark has led Avista since its inception and has an impressive record of achievement in pioneering and development in the mortgage technology space. Mark was a team member on the Fannie Mae project that developed the groundbreaking technologies of Desktop Underwriter and Desktop Originator and later became responsible for their implementation and adoption as the industry standard among Fannie Mae lenders.  He went on to create Resource Bancshares Mortgage Group’s core Web-based e-business platform, e-RBMG.

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