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Technology Allows Lenders To Calculate Their “True Cost” Of Origination

Promontory MortgagePath, through its Promontory Fulfillment Services (PFS) unit, has developed a new online Cost Savings Calculator that lets banks, credit unions and mortgage companies quickly compute its own operational cost of residential mortgage loan origination and compare that to PFS’s outsourced solution.

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The Cost Savings Calculator requires only a minimal amount of information:

>>Number of loan units the institution originates per month.

>>Number and annual salary of full time loan-production staff (processors, underwriters, closers and administrative staff).

>>Number and annual salary of support staff (compliance/legal, secondary marketing and technology).

The calculator enables the institution to calculate its own cost of origination and shows what a similar cost would be if PFS managed their fulfillment process. The calculator only focuses on operational costs once the loan has come into the institution and does not factor in loan officer compensation, because it assumes the client will continue to prospect for the loans. In addition to the cost analysis, the calculator will also identify areas of the operation, such as compliance, which may be under-staffed and could create potential compliance risks.

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“The Mortgage Bankers Association (MBA) publishes a wealth of data on the cost of origination, and today the average is above $8,000 per loan, when LO compensation is factored in,” said Ken Janik, head of operations, Promontory Fulfillment Services. “But these are averages and they may or may not be the right benchmarks for different sized banks with different overhead structures and business models. Our calculator uses each institution’s own numbers and instantly delivers a client-specific answer.”

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Bruce Witherell, chief executive officer of Promontory Mortgage Path added: “In the last few months we have seen a number of mid-tier banks exit the mortgage origination business because they couldn’t justify the low margins or stand the cyclicality of mortgage lending. Our new calculator lets executives do their own math, and in minutes, come to their own conclusions about their true processing costs. They can also see how they can competitively continue to offer mortgages as a product without maintaining a mortgage operation.”

About The Author

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 tony@progressinlending.com.

U.S. Bank’s Home Mortgage Group Upgrades Its Origination Process

U.S. Bank, the fifth-largest commercial bank in the United States, has selected Sapiens DECISION Manager, a business decision management solution, as a strategic component of its modernized mortgage platform.

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The Sapiens DECISION solution will enable the bank to quickly and cost effectively deliver solutions to its mortgage customers.

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“Sapiens has a proven ability to model a business solution and deliver high quality results in record time,” said Harold Westervelt, managing director of Sapiens DECISION. “We look forward to helping the Home Mortgage group at U.S. Bank achieve their business goals.”

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A number of the world’s leading financial institutions are using Sapiens DECISION to author, manage and automate their operational, policy and regulatory decisions. An integrated solution designed to leverage, enhance and augment existing technology, DECISION drives consistency and reusability to ensure that the operational decisions that impact performance are accurately and consistently adhered to – minimizing risk, rework and resource requirements.

Pavaso And First Title Partner To Help Enhance Digital Closing Adoption

Pavaso has partnered with First Title & Escrow, Inc. (“First Title”), a technology-focused national settlement services firm, to provide clients with a comprehensive digital closing program. Pavaso, a leading mortgage technology provider, is the developer of the industry’s only truly digital mortgage enterprise solution platform.

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Headquartered in the Washington D.C. Metropolitan area, First Title provides title and settlement services nationally. The company prides itself on being a technology-focused provider, committed to applying the latest in digital advancements to create the best possible consumer experience.

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“The fully digital mortgage is here, and we couldn’t be more excited to partner with Pavaso,” said Stephen Papermaster, President of First Title. “With this partnership, First Title is among the first to offer fully digital closing services to our clients.”

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Pavaso’s technology is simplifying the closing process for home buyers across the country and delivering an accurate, compliant, consistent closing in 15 minutes or less. The collaborative platform brings title documents and lender documents together for digital signature and allows consumers to have access to all documents anywhere, on any device prior to closing. Pavaso’s Digital Close platform provides flexibility in closing by producing hybrid closings as well as complete eNote and eVault transactions.

“We are finding that mortgage lenders and their customers are beginning to expect the digital closing option, and service providers unable to deliver that are falling behind the curve,” said Mark McElroy, CEO, Pavaso. “First Title, however, has long been among the early adopters when it comes to new and consumer-focused technology. As a result, this partnership is a natural fit which will only accelerate the ongoing digital transformation industrywide.”

About The Author

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 tony@progressinlending.com.

FirstClose Partners With Chicago Title Insurance Company To Provide Wider Range Of Services

FirstClose, a provider of technology solutions for mortgage lenders nationwide, today announced a partnership with Chicago Title Insurance Company.

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Through this integration, the FirstClose Report now provides financial institution clients with Chicago Title’s property search, legal and vesting products and services. The property search report includes items such as the last grantee of record, a legal description of the property, a list of mortgages and liens on record, the permanent index number and the latest transfer deed on file. This report can be used with residential or commercial properties.

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In addition, FirstClose and Chicago Title’s full legal and vesting services include the last grantee of record, a legal description of the property in text format and the latest transfer deed on file.

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“Our comprehensive title products and services enhance FirstClose’s home equity and refi suite of offerings to add efficiencies and further expedite closing times for lenders,” said Thomas Curry, vice president of Chicago Title.

“We are thrilled to be working with Chicago Title and know that this partnership will only improve our product offering and allow us to better serve our clients,” said Tedd Smith, chief executive officer of FirstClose. “Giving our clients options when it comes to products and services has always been a key part of our business. Partnering with a powerhouse like Chicago Title will help us continue to drive our business forward.”

Millennial Homebuyers Exercised Their Purchase Power

Millennial homebuyers across the country exercised their purchase power in April as competition for limited housing inventory continued. Eighty-nine percent (89 percent) of mortgage loans made to Millennial borrowers during the month were for new home purchases, up one percentage point from the month prior, and the highest percentage since May 2017, according to the latest Ellie Mae Millennial Tracker.

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Interest rates also continued to rise in April to 4.73 percent, on average, up from 4.63 percent the month prior. This is the highest interest rate recorded since Ellie Mae began tracking Millennial loan data in January 2014.

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As interest rates crept up, average loan amounts to Millennials fell. The average amount was $194,300 in February, $192,055 in March and $188,171 in April.

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“Most Millennials are buying a house because there are major changes happening in their lives such as starting a family, getting a new job, or because they’ve decided that they want to build equity and stop renting,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “We believe Millennial home purchases will continue to climb this summer and while interest rates may slightly impact the size of homes borrowers can get for their money, we don’t foresee it impacting their desire to buy.”

Overall, conventional loans represented 67 percent of all closed loans to Millennial borrowers, while FHA loans held steady at 29 percent from the previous month. VA purchase loans for Millennial borrowers represented 79 percent of all VA closed loans in April, steady from the month prior, and up from 66 percent in February.

The time it took for Millennial homebuyers to close a loan remained flat month-over-month. Purchase loans took an average of 39 days to close and refinance loans took an average of 44 days. FHA purchase loans took an average of 40 days to close, compared to 41 days in March. VA purchase loans averaged 49 days-to-close, compared to 45 days the month prior.

About The Author

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 tony@progressinlending.com.

Credit Interlink Integrates Income Verify With LendingQB For Faster Verifications

Credit Interlink, a provider of SaaS mortgage origination technology solutions, has integrated its Income Verify, with LendingQB, a provider of SaaS loan origination technology solutions, to facilitate quicker and more efficient 4056-T verifications.

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Thanks to certification through Fannie Mae’s Day One Certainty, Income Verify has direct access to tax transcript verifications through the IRS in order to expedite the time needed to process requests within LendingQB’s LOS. Likewise, the solution better prevents the risk of fraud through its secure interface, creating a more cost-effective way to collect borrower data.

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“In a world growing more dependent on digital technology, borrowers have come to expect the lending process to replicate experiences they experience in other areas,” said Mark Yoder, Vice President of Business Development, Credit Interlink.  “With Income Verify, borrowers are able to provide their information up front and loan officers are able to verify it without adding unnecessary delay to the origination process, all in a secure manner.”

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LendingQB’s web browser platform provides mortgage lenders with core LOS capabilities using modern web-optimized technology, enabling robust integrations to other web platforms such as Credit Interlink. Using LendingQB’s API framework, Credit Interlink is able to extend the capability of lenders, expediting the origination process and allowing more direct interaction with borrowers and other parties to the loan.

“Credit Interlink’s streamlined approach to data verification, credit and fraud is innovative and perfectly fits the ever-changing mortgage industry,” said David Colwell, vice president of strategy at LendingQB. “By utilizing Income Verify, our lenders are able to verify borrower data in a fast and safe manner, enabling them to reduce the time needed and the overall cost to originate loans.”

Enhanced Offering Provides Much-Needed Differentiator For Lenders

Mortgage Coach, creator of point-of-sale borrower conversion software, has partnered with Optimal Blue, a provider of secondary marketing automation. Through direct integration with Optimal Blue’s API platform, every Mortgage Coach application now seamlessly connects real-time, compliant product and pricing data with the compelling financial analyses Mortgage Coach is known for.

Through this collaborative effort and newly expanded product offering, Mortgage Coach and Optimal Blue enhance their long-standing strategic partnership and take their industry value proposition to a whole new level.

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“Without ever leaving the Mortgage Coach app on their mobile device, loan officers can create informative, side-by-side comparisons highlighting multiple loan programs and comprehensive pricing information in just seconds,” explained Bob Brandt, Vice President of Marketing & Strategic Alliances for Optimal Blue. “Combining the sophisticated product and pricing data at the heart of every mortgage transaction with a compelling user experience — and doing so whenever, wherever it matters most — is a game changer for the industry.”

The benefits are not exclusive to lenders and loan officers. Today’s consumers immerse themselves with the details behind major financial decisions and pride themselves on deeply understanding their alternatives. Mortgage financing is no exception. When provided with a comparative, in-depth analysis of the financial impact of their best financing alternatives in a highly consultative environment, consumers are more engaged with their loan officers and more likely to move forward with a loan.

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“In today’s price compression marketplace, converting every prospect into a borrower is the most important aspect of achieving increased profits for mortgage lenders,” said Joe Puthur, President of Mortgage Coach. “This new innovation gives lenders the instantaneous benefit of earning more commitments at a lower cost of acquisition.”

Mortgage Coach, the company’s flagship platform, is the technology behind the Total Cost Analysis (TCA), a report that illustrates the long and short-term impact of any loan program on the borrower’s financial situation. The TCA incorporates real time rates, fees, closing costs, and program information and presents its findings using simple yet powerful graphical elements like charts and graphs. The TCA provides a level of clarity that is virtually impossible to achieve without the Mortgage Coach platform.

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“The difference between using a TCA to explain mortgage options and using any other method is like the difference between having a film described to you versus watching it in high definition with Dolby sound,” explained Mike Hardwick, President of Churchill Mortgage. “Having been in partnership with Mortgage Coach and Optimal Blue for several years now, we’re happy to have helped thousands of borrowers make a better, more informed decision. These new capabilities will provide greater clarity, transparency, and confidence to any borrower – in a way that is faster for every loan professional.”

An LOS To Satisfy All Lenders

Most loan origination or LOS offerings look to target specific size lenders with different offerings for a top 50 lenders vs. a smaller lender, for example. Wipro Gallagher Solutions (WGS), a Wipro Limited company and provider of loan origination software solutions, has launched its NetOxygen SaaS loan origination solution for mortgage lenders of all shapes and sizes.

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NetOxygen SaaS brings the power of NetOxygen, an enterprise class loan origination system that helps lenders reduce origination costs and boost production efficiency through automation.  NetOxygen connects to a front end portal and fintech offerings thus providing seamless interactions to improve borrower experience. NetOxygen SaaS enables quicker deployment and scalability to match business growth with an all-inclusive, per transaction pricing, which is based on business outcomes.

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NetOxygen SaaS provides comprehensive product coverage across mortgage, home equity, HELOC (home equity line of credit) and unsecured credit lines origination. The platform integrates an extensive vendor ecosystem which provides multiple options for standard services like credit, appraisals, fraud checks, etc. NetOxygen SaaS supports retail, correspondent and wholesale markets, and also enables niche offerings like construction lending for one close, multiple close, homestyle renovation and FHA construction.

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Key features of NetOxygen SaaS include:

>>Sophisticated workflow engine, allowing lenders to implement distinct lending policies and procedures;

>>Automated underwriting for improved efficiency;

>>Comprehensive pool of rich APIs, to enable easy integration with other applications;

>>Advanced feature supporting ADR and OCR capabilities;

>>Self-service tools to enable lenders to perform more tasks, with ease and speed.

“NetOxygen SaaS offers an extensible and scalable platform that caters to lenders’ ever-changing business needs and provides an all-encompassing solution to improve end-to-end loan origination,” said Scott Dunn, Head Product Management, Strategy and Compliance, Wipro Gallagher Solutions. “Among the platform’s many differentiators, what stands out is the ability to quickly configure business rules, products, fees and deliver industry leading functionality  for compliance, imaging, reporting, and documents generation in combination with best-in-class providers.”

About The Author

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 tony@progressinlending.com.

One Major Impediment To Digital Mortgages-Solved

As I travel across the country attending numerous industry events, meeting with a host of strategic partners, and talking to hundreds of lenders, everyone wants to discuss digital mortgages.  In those discussions, it is clear that to truly deliver on the digital mortgage promise of providing a simple, yet powerful borrower experience while streamlining the mortgage process and reducing costs, collaboration is key.

Quality partnerships are critical to providing the type of collaboration that is needed. No one provider can deliver everything required for today’s digital mortgage.  These partnerships can deliver real-time access to data with direct integrations; allowing providers to pass pertinent data to the loan transaction more quickly and seamlessly to both loan officers and borrowers during each step of the loan life cycle.

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With this channel-less strategy, productivity increases and has the potential to reduce costs for the lender.  These strategic partnerships also put a dynamic blend of powerful resources, like pulling credit or running pricing scenarios, into the palm of the hands of loan officers when and where they need this information for the borrower.  Efficiency increases as lenders nurture borrowers and better facilitate all phases of the digital lending process.

In addition, the right strategic partnerships and digital mortgage platform can deliver valuable simplicity. The days of app overload are over. Loan officers can now have a single, branded platform to manage the loan lifecycle.

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While most would agree that the benefits of collaboration through strategic partnerships is the way to improve the digital mortgage experience, one major impediment to this still exists in the traditional partnership model.

Historically, service providers spend a great deal of time discussing the benefits of partnering, potential mutual clients, and how the partnership will provide incredible value to the industry.  Then the discussion turns to who is going to pay for the time and resources to create the integration, test it, and maintain it going forward? The partners inherently decide to create a revenue- sharing integration model.

That’s where the impediment lies.  The traditional revenue-sharing integration model increases the cost to lenders and in turn the borrower.  Therefore, the goal in delivering a digital mortgage is providing a simple yet powerful borrower experience while streamlining the mortgage process and reducing costs through collaboration just increased the price to originate.

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At SimpleNexus, we take a different approach.   We are committed to working with our strategic partners to better deliver on digital mortgage expectations without demanding a revenue sharing integration model; reducing the cost to lenders and their borrowers.  This type of collaboration is making a profound difference in the mortgage industry, which is why 15 of the top 30 lenders partner with SimpleNexus.

We are the mobile-first digital mortgage solution that makes everyone’s life easier.  Lenders can make everything more convenient for their borrowers. Applying for a loan can be done from anywhere. Instead of sending their W2s, bank statements, or tax returns to your office, borrowers can securely send documents using their phone. If they have a question or need to call, they can easily access your contact info from a branded app. If only the rest of life could be this easy.

Who wouldn’t want to work with a lender who makes mortgages easier? Mortgage lenders who use SimpleNexus close loans up to 20 percent faster—which means borrowers get into their homes faster. With one straightforward system for borrowers to use, you can make everything easier, faster, and more cost-effective.  A powerful way to deliver on the digital mortgage promise.

About The Author

Joe Wilson

Joe Wilson is chief sales and marketing officer at SimpleNexus, a digital mortgage solution provider serving 15 out of the top 25 retail mortgage lenders in the US. SimpleNexus enables lenders to originate and process loans from anywhere. Loan officers can manage their loan pipeline, order credit, run pricing, and send pre-approvals— all on the go. The platform also connects loan officers to their borrowers and realtors to easily communicate and exchange data in a single location throughout the entire loan life cycle. Today, SimpleNexus serves more than 160 enterprise mortgage companies and more than 15,000 loan officers nationwide. Over 450,000 borrowers have used the app, resulting in $100B+ in transactions flowing through the platform.