Future Lending Success


The Mortgage Bankers Association (MBA) announced that it forecasts $1.10 trillion in purchase mortgage originations during calendar year 2017, an 11% increase from 2016. In contrast, MBA anticipates refinance originations will decrease by 40%, resulting in refinance mortgage originations of $529 billion. In total, mortgage originations are expected to decrease to $1.63 trillion in 2017 from $1.89 trillion in 2016. Further, for 2018, MBA is forecasting purchase originations of $1.18 trillion and refinance originations of $410 billion for a total of $1.59 trillion. So, we sat down with Joe Dahleen, Vice President of Consumer at Axia Home Loans, to discuss how lenders can be successful in the current mortgage market. Here’s what he shared:

Q: What do you see as the future of straight through processing?

JOE DAHLEEN: Purchase certainty is important. DSD + STP= GPC, which means direct source data plus straight through processing equals greater purchase certainty. I am doing this at the point-of-sale today. I take the path of least resistance. I do the VOE and the VOD at the point-of-sale. if I get those two data points, I can get a good idea on if I qualify and I can turn the file very quickly.

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Q: How will things like outsourcing verification and calculation of income change over time?

JOE DAHLEEN: I outsource the calculation of income. I drop it into FACTCheck, The FACTCheck tax transcript report returns the proprietary FACTCheck rules engine analysis on all income sources in a detailed, interactive report that contains both calculated qualifying income and messages of explanation and instruction. These rules are designed to test for GSE compliance, as well as a borrower’s ability to repay (ATR) under Appendix Q. In the end, underwriting doesn’t want to see it until it’s a full file. So, my POS allows the customer to submit data, upload data and consent for us to get their data electronically. Once I get that I put it into FACTCheck. I do all of that at the point-of-sale. My assumption is that more lenders will jump on that bandwagon.

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Q: How does the mortgage industry craft a process where the user experience has no friction?

JOE DAHLEEN: My next goal is to eliminate fraud when you inject the driver’s license. Using technology you can scan the driver’s license and it will pull that data and populate the 1003 electronically. For U.S. driver’s licenses, Mobile Verify put out by a company called Mitek has the ability to find and decode enhanced security features. When this feature is found, a document is 100% authentic. When a document is authenticated by Mobile Verify, it is a genuine government-issued identity document. If fraudulent, it is immediately rejected. Documents that are suspicious are returned with warnings indicating that additional checks on the consumer are required. You want to do identification verification at the point-of-sale and pre-population that data. HELOCs will be big in 2017 and we can automate all of that at the point-of-sale. You want to get rid of any ambiguity during the process.

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Q: How will the recent governmental changes impact the mortgage market in 2017 and beyond?

JOE DAHLEEN: We’ll see some loosening of regulations. We won’t see too many changes in what has been activated so far. Only 44% of the rules promised in Dodd-Frank have happened, so some of those new rules to come may be eliminated or streamlined, but we won’t get rid of the CFPB or anything that has happened so far. I do think there will be better oversight of the CFPB, though.

Q: How do you think lenders handled this year’s regulatory challenges and what key lessons can we take from those examples?

JOE DAHLEEN: Lenders have gotten better at dealing with change. Deploying additional technology has gotten better. The pace of innovation on the mortgage technology side has caught up. I’d still like to see more adoption of the e-note. Change management has gotten better because the teams have gotten more used to change. The independent mortgage bankers have done a good job of pivoting to deal with new situations. We can’t fear change.

Q: When evaluating their technology strategy, what elements should lenders keep in mind?

JOE DAHLEEN: Lenders always have to consider the customer experience. They should be thinking: What is the customer’s journey? You need to make everything easier for the consumer. You better make sure they have a good experience. If your customer has to download a document, wet sign it and get it back to you, you’ve failed. We pester the consumer all through the process and we don’t have to do it that way. You may not loose the loan this way, but that customer is not going to refer you.

Q: What is perhaps the single biggest misconception lenders believe regarding technology?

JOE DAHLEEN: Some lenders still think that one solution can do everything. There is a fallacy that there is one solution that can automate everything. Lenders spend a lot of time and energy implementing end-to-end systems, but even those systems don’t do everything. No LOS can serve every need.

Q: What do lenders need to do in 2017 to remain competitive?

JOE DAHLEEN: Lenders need to lower the cost to produce so you can lower your rates and do more loans. You can’t spend $6,000 to originate a loan. The only way you get there is by lowering cost.

Industry Predictions

Joe Dahleen thinks:

  1. The adoption of e-note will lower the cost to produce by 25%.
  2. Verification of assets and income will be done at the point-of-sale.
  3. The confluence of title and appraisal as one quoting platform will be the next big innovation.

Insider Profile

Joe Dahleen is currently Vice President of Consumer at Axia Home Loans. Prior to joining Axia, Joe was Senior Vice President of Marketing at Primary Capital Mortgage, a Resource Capital Corp. company, and Executive Vice President and Head of Mortgage Originations at Elevation Home Loans, LLC, which was a start-up residential mortgage company acquired by Resource Capital Corp. Joe is a veteran of the mortgage industry who specializes in executive management and strategic marketing. He is known for being a strong advocate of technology and an expert in leveraging the latest communication methods to support successful growth.

Here’s What The Future Mortgage Process Will Look Like …

As we’ve been reporting on, for the sixth consecutive year, PROGRESS in Lending Association hosted its groundbreaking ENGAGE Event designed to engage the mortgage industry to discuss and find solutions to so many pressing  industry issues. This was a frank and thorough exchange of ideas and tips about how to solve the problems that face the mortgage industry.  We reported on what the speakers said about the future of mortgage regulatory compliance, the future of mortgage technology innovation, and today we’ll tell you how they see the future of the mortgage process itself. Here’s what they had to say:

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“The problem is that you e-sign here, submit conditions here, and you still get calls,” said Lionel Urban, CEO, founding partner and chairman of the board at PCLender. “That shouldn’t happen. You should be using as much machine-readable data as possible coming straight from the source, not the borrower, and that way the processor will only deal with exceptions. that’s how the process should work.”

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From a lender’s perspective, Joe Dahleen, vice president of consumer lending at Axia Home Loans, points out, “You have to get to the data upfront. We as lenders should be able to verify the borrower, their income, their bank statements, etc. electronically from the source. Also, we are getting things like the appraisal and other information as XML. Similarly, we are being required to deliver more to the investor as XML. So, technology vendors need to offer lenders a way to easily store and search all of that XML because the LOS doesn’t do that today.”

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Meanwhile, Rebecca Walzak, founder of rjbWalzak Consulting, wants technology to focus more on risk so the mortgage process of the future produces quality loans 100% of the time. “Where is the technology to help lenders mitigate risk?” she asked. “I’d like the mortgage industry to be a real industry instead of just a follower of our peers or the regulators.”

Brian Koss, chief storyteller, executive vice president, national head of production at Mortgage Network, agrees.”Making changes in reaction to an outside event hasn’t worked,” he argued. “We, as an industry, have to start being proactive. We have been so busy just trying to comply with the latest rule that we haven’t stopped to take a breadth. We have to look at the process in a new way. The cost to originate a loan continues to go up, so what should we do? We have to hold the line and continue to fight to genuinely improve the process so we can lower cost. That has to be the focus of every lender.”

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

Newsflash: A New Technology Subsidiary Debuts

Taxdoor, a new division of Cogent Road Inc., has introduced its flagship product—Taxdoor— a SaaS tool that will make ordering IRS transcripts as simple and easy as ordering a credit report. Cogent Road plans to introduce its Taxdoor division during the National MBA conference in October.

Taxdoor solves a significant problem that lenders face—the time consuming and inefficient process of verifying a customer’s stated income with tax transcripts from the IRS. This typically involves the collection of a signed 4506T form from applicants, which must be reviewed and matched to the correct tax order and delivered to the lender’s tax vendor. (If 1040s and W2s are needed, two signed 4506T forms are required.) If the 4506T has any errors, such as an incorrect match of applicant’s address to tax year, the IRS will reject the order, requiring a repeat of the entire process.

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Taxdoor is the streamlined Internet/mobile solution to obtain accurate IRS transcripts within 48 hours and without the need a signed 4506T form upfront. When the tax transcript is requested, the applicant is instantly notified via text and/or e-mail and uses a smart phone, tablet or PC to verify or update their addresses for each tax year requested. Upon verification, Taxdoor creates correctly populated 4506Ts based on IRS regulations, which are then digitally signed in accordance with Federal e-sign regulations. Once signed, the 4506Ts are automatically delivered to the IRS electronically in order to authorize the release of the requested tax transcripts. As soon as it’s received by the IRS, the request is processed and the lender receives the transcript within in 48 hours.

“Ordering tax transcripts has always been a labor-intensive process for lenders; one that is subject to time-consuming errors, rejections and processing delays,” said Joe Dahleen, Taxdoor President. “We have the technology to change that and borrowers are eager to adopt it. We developed Taxdoor to be a lender-friendly way to mitigate risks, increase overall production and eliminate 4506T related labor costs and reduce processing problems for everyone involved in the loan transaction.”

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One of Taxdoor’s key benefits is the ease with which borrowers are able to authorize the release of their tax transcripts. Lenders simply place transcript orders electronically and no longer need to invest labor into the burdensome process of collecting, reviewing and delivering signed IRS forms. Taxdoor efficiently manages the entire 4506T signing process on behalf of its lender clients, ensuring that the IRS forms are completed, signed and delivered in full compliance with IRS policies. In addition to the requested tax transcripts, Taxdoor also ensures the lender receives the signed 4506Ts.

“Not only does Taxdoor significantly enhance the borrower experience, but lenders can now easily obtain IRS verified income data earlier in the qualification process,” said Dahleen. “Lenders and loan originators will be able to highlight this solution as one of their special service features.”

For additional details about Taxdoor, visit

Video Insights: Engage Participant Calls For A More Personal Mortgage Process

*Video Insights: ENGAGE Participant Calls For A More Personal Mortgage Process*

***How can lenders truly engage the borrower in a more meaningful way? Over 100 mortgage executives gathered at the PROGRESS in Lending ENGAGE Event. They shared their views on the future of mortgage lending. One audience member dared everyone in the room to think differently about how lenders treat borrowers. Specifically, here’s what Joe Dahleen of Elevation Home Loans had to say on this topic:


****Be sure to attend ENGAGE 2013 in October of this year so you can join the conversation and improve the mortgage space.