Challenged Implementing A New LOS?

*Challenged Implementing A New LOS?*
**By Tony Garritano**

TonyG***With the new regulatory onslaught, lenders are increasingly looking to change their LOS. But changing your LOS isn’t easy. So, when I heard about this news from LendingQB, I had to share it with you. LendingQB will be holding a free webinar on why lenders struggle to successfully implement new loan origination technology systems. The webinar will be held on March 27, 2013, at 1:00 p.m. Eastern Daylight Time. Here’s the scoop:

****Research reveals that 62 percent of IT projects fail to meet their schedules; 49 percent run over budget; 47 percent had higher-than-expected maintenance costs; and 41 percent failed to deliver the expected business value and ROI. Attendees of the webinar will gain firm understanding as to why this is and how lenders can avoid becoming a statistic.

****“Mortgage lenders are on the hunt for new LOS platform as a way to increase efficiency and maintain compliance with new lending rules,” said Linn Cook, marketing director at LendingQB. “However, there’s always the risk that LOS implementations go over budget or fail entirely, costing lenders time, money and the opportunity to gain market share. We’ve performed extensive industry research and fully understand why this is happening and what lenders can do to achieve a well-planned, successful implementation that meets their expectations and delivers an attractive ROI.”

****The webinar will explore the risks associated with LOS implementations and discuss the role of web-based software, customer service and the changing dynamics of vendor-client interactions in improving LOS implementation success. A real-world case study will be offered by a lender that has been through successful LOS implementations and also observed failed projects and those that fell short of expectations or went over budget.

****Webinar speakers include:

****>>Linn Cook, Marketing Director at LendingQB

****>> Lester Alitagtag, Enterprise Solutions Manager at LendingQB

****>> Ron Cahalan, Sales Manager at The Lending Company

****Interested parties can sign up for the webinar by clicking here.

An Inspired Approach To LOS Implementation

*An Inspired Approach To LOS Implementation*
**By Tony Garritano**

TonyG***Yesterday I told you about a creative LOS. Today I want to continue that conversation. Lenders are open to changing their LOS but it’s hard to change. So how does the LOS company speed up the implementation without compromising quality? A good LOS can reach this balance. I talked to LendingQB about this topic. Here’s what they said:

****“We know that lenders are very entrenched with their LOS,” Linn Cook, Marketing Director at LendingQB noted. “Regardless, most LOS systems are still installed software. You can’t just open your browser and access your LOS. When you are talking about installed software you’re looking at it from a 1999 point-of-view. You have to have the network and the people to run an installed piece of software. You are not just purchasing the software. Lenders don’t even think of these costs in most cases. They see this as the cost of doing business.“

****LendingQB shared with me that 90% of questions in an RFP relate to system features. They don’t have questions or rubrics to score service. This may be why studies tell us that 35% of complex implementations fail and 65% go over budget and aren’t delivered on time.

****“Having direct access to the client’s software allows us to do more,” said Cook. “We can deliver updates every week instead of every quarter. We can be a true partner and build custom rules as the client needs them.  The clients tell us what they want and we do it. Lenders need to understand that the fact that the LOS claims that it is Software as a Service doesn’t mean that service is a core competency, it just means that they are web based.”

****And sometimes, as they say, the proof is in the pudding. All lenders want a fully configured LOS, but with most LOS companies that costs extra. In a SaaS model it shouldn’t. For example, OGI Mortgage Bankers, a fast-growing mortgage lender based in Los Angeles, California was able to launch and begin using a fully custom configured LendingQB platform immediately within seven weeks of signing the contract.

****“Since I stepped in this business 25 years ago, I’ve never seen an implementation happen so quickly and thoroughly,” said Harry Oh, president and CEO of OGI. “We made the decision to use LendingQB right before New Year’s Day but we didn’t expect to start using the system until after Easter. Being ahead of schedule saves us more than time and effort, it saves us money.”

****OGI is like many modern mortgage bankers in that they wanted to simplify their technology by replacing outdated client-installed software with a web-based system. “When we started the company in 2009, we bought a whole system – software, hardware, networking equipment – and spent an entire year getting it setup. It cost us a lot of money just to configure and learn how to use the system,” said Oh. “Then our vendor got acquired. That’s when we realized we had the wrong approach to technology. We’re a mortgage lender, not an IT company. We don’t need to own everything.”

****In response, Oh actively began looking exclusively for web-based LOS providers. Although only a handful of mortgage LOS vendors offer a true web-based system, OGI felt it was a better long-term strategy. “We see other industries enjoying the benefits of web-based applications, so to us it’s a proven model,” Oh noted. “But we didn’t make any compromises in order to get a web-based system. Price, quality and service still matter.”

****LendingQB takes all new clients through a comprehensive deployment process that is unlike anything Oh had seen before. “The day after we signed with LendingQB, their deployment team was sending us emails and scheduling meetings,” Oh said. LendingQB started with a detailed workflow discussion of OGI’s operations, and then provided them with an online tool to track task assignments and deployment status updates. “They were involved with our implementation at the ground level, gathering information from us and making changes to our system directly.”

****After seven weeks of aggressively implementing the platform, OGI’s staff was fully trained and ready to start working in the LendingQB environment. “When I think back to our first system and the amount of time and resources we poured into purchasing it and getting it setup, it’s night and day,” remarked Oh. “LendingQB is like a part of my staff. They set milestones and kept us on track and prioritized. They did most of the configuration for us and responded quickly to any changes we wanted to make. Their organization and commitment to us was impressive.”

Take A Hard Look At Your LOS

*Take A Hard Look At Your LOS*
**By Tony Garritano**

***The rate of lenders switching their LOS has increased. Existing LOS companies just aren’t cutting it and lenders are looking at new options for a variety of reasons. So, what should they be in the market for as they begin this search? LendingQB revealed the results from its Enterprise Process Assessment engagements with clients and prospects, which is a workflow evaluation model designed that helps lenders make objective decisions on their technology initiatives. Here’s what the research revealed when it comes to how lenders are evaluating technology:

****LendingQB developed the Enterprise Process Assessment (EPA) as a tool to help lenders fully understand the drivers that motivate technology improvement efforts. “Research shows that upwards of 65 percent of complex software implementations result in failure,” said David Colwell, vice president of corporate strategy at LendingQB. “Even for implementations that do succeed, more than a third of these projects go over budget. The goal of the EPA is to help lenders avoid being one of these statistics and achieve an optimal ROI that effectively addresses the technology goals they have in mind.”

****LendingQB unveiled their EPA model earlier this year, and conducted a series of webinars over the summer to help lenders objectively evaluate mortgage technologies. The EPA model engages lenders through in-depth interviews with lending executives and management, and is followed by detailed mapping of a lender’s unique workflow, which then provides a framework for LendingQB to construct a custom survey that gathers productivity assessments from the lender’s staff. A statistical analysis is then applied to identify key improvements and correlate data along with recommended technology objectives and a clear path forward roadmap.

****EPA findings show that:

****>> Lenders tend to focus on surface-level features instead of addressing solutions to underlying problems.

****>> There are typically five major productivity bottlenecks that lenders try to address with new technology.

****>> Prioritization of features is determined using subjective methods instead of relying on objective or empirical data such as productivity improvement.

****>> Stakeholder input is typically gathered top-down versus bottom-up.

****>> Vendor evaluations focus primarily on system functionality and give less weight to system utilization.

****The EPA provides lenders with a balanced and objective perspective on a vendor’s complete technology stack and uncovers issues that are not readily apparent to management. “Even large organizations that can produce detailed RFPs are not immune to what I term ‘feature enamored syndrome,’ or poor weighting of technology demands,” noted Colwell. “We designed the EPA to be as an aid to existing evaluation methods.”

****While you’re in the market for technology, you should be sure to check out the Lender’s Digital Marketplace, as well. It’s an easy way to do a Web search that will only result in lending technology results. Move over Google and Yahoo. It’s the industry’s first solution selection engine. I encourage you to check it out HERE.

Powering Today’s Lenders: Shining The Light On A Tech-Savvy Lender

*Shining The Light On A Tech-Savvy Lender*
**By Daniel Liggett**

***We are continuing our series focusing on lenders who describe the impact that technology has had on their lending operation. The ‘Lender Spotlight’ shines this month on Country Bank for Savings, a $1.5 billion lender located in Ware, Massachusetts. Told in their own words, each narrator shares the unique and common challenges they faced and how they ultimately found their solutions by employing the right technology. So, let’s get started:

****Denise Hawk, Director of Retail Lending for Country Bank outlines how the bank’s desires shaped and directed their technology search and how their technology choice continues to impact her lending operation. She shares:

****“Basic necessity drove Country Bank to begin a search for a new LOS. Factors for the search included the lack of functionality of our existing system and a desire to have more control over the lending process. We also wanted to increase the efficiencies of the LOS so that we could do more with less and do it more effectively.

****“Our search process led us to the PowerLender LOS, developed by ASC and marketed and supported by Specialized Data Systems of East Haven, CT. We liked that fact that PowerLender was flexible and user-definable. We could see that the ability to refine the system to our needs would provide us with a great deal of control over our operations as well as making us more efficient. An additional thing that drew us to PowerLender was its ability to process mortgage and consumer loans from the same lending platform.

****“We used SDS for implementation help with our mortgage setup. Their extensive experience in configuring LOS systems, especially with lenders of our size, was evident. We used a product called SharePoint which outlined the project and helped us know what was expected of all of the participants, and we had weekly meetings which kept us on track.

****“Our mortgage operation went live first, and then we implemented our consumer setup in PowerLender ourselves. Although it took us a bit longer to implement consumer without the help of SDS, we were able to go live on consumer using our internal resources. Being able to process consumer loans from the same system as our mortgage has saved us lots of time and extra expense of having two systems.

****“We are now working on our MERS integration as well as a two-way integration with our core banking system. This interface will let us send specified borrower data from a loan file within PowerLender directly to our core. This interface lets us send specified borrower data from a loan file within PowerLender directly to our core banking system and also lets us extract borrower data as well. When an existing or former borrower requests a loan or other service from us, we can submit a query (loan record number, last name, SSN, etc.) in order to retrieve the information and have it automatically populate a new loan record in PowerLender. There is no need for us to re-key any data and it only takes a second.

****“Some additional efficiencies that we were able to implement into our lending operation using PowerLender include an internal emailing system that operators use to automatically alert the lending staff as to the status of the loan as it moves through the various stages of the pipeline. We also created a single screen containing all of our linked websites so that operators can quickly identify and access third party provider information. We like the reporting capabilities in PowerLender that has allowed us to customize our reports and store the reports electronically as we move towards establishing a paperless lending operation

****“All in all, we are reaping the benefits of PowerLender as a customizable loan platform that has allowed us to become more efficient and has given us a great deal of control over our lending operation.”