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Market Analysis: Some Final Thoughts

*Some Final Thoughts*
**By Tony Garritano**

***For the past two days now I’ve been talking to you about exactly how many people go into processing a loan. It’s been a good journey of discovery for me. Process improvement is critical to our industry so we need to really understand what we’re improving first. I hope after reading these past few days you have a better idea of how intricate the mortgage process really is. So, how do we really improve the process? Here are some ideas:

****“The loan process continues to be extremely complex. At Xerox Mortgage Services, we are seeing our BlitzDocs users hand-off loan files through electronic collaboration as many as 20 times during the origination process,” noted Nancy Alley, vice president and general manager, Xerox Mortgage Services. “This collaboration occurs both internally – with participants like LOs, processors and underwriters – and externally – to the borrower and trading partners such as verification companies, MIs, closing agents and investors. At each hand-off, specific loan documents need to be reviewed while other documents are being added.”

****How do lenders feel about this topic? LeaderOne Financial was founded in 1992 by its CEO, A.W. Pickel III, a past president of the National Association of Mortgage Brokers. In 2011, the company originated nearly $500 million in mortgages through its retail loan officers and was named one of the fastest-growing private companies by Inc. Magazine (#12 in the nation among financial services companies).

****Mr. Pickel shared, “We were among the first lenders to go paperless. I don’t think most lenders process a loan differently. As I said, we are paperless lender. So, we’re doing all of this electronically. I don’t see how I can use technology to make the process more automated. As it is for us, we don’t paper out until closing. All the steps are done electronically here and the e-file is handed off to these different individuals. We don’t paper out here until closing. An electronic closing would be ideal. That’s where we need to go. Right now technology allows me to have a few people that are really good at what they do. These are people I trust. They do a great job.”

****Rebecca Walzak, president at consulting firm rjb Walzak Consulting Inc., agreed, “The process itself hasn’t changed very much. I remember when we had runners that would collect all the documents and order credit. Once we got the credit report back we’d go through it manually. Now all the ordering of outside services is electronic and we get back data that can be electronically reviewed. However, the processor still pulls it all together, checks everything and moves it along. Hopefully going forward technology won’t just automate traditional processes, it’ll go further to actually improve the process.”

Technology Spotlight: The Trials Of Picking A New LOS

*The Trials Of Picking A New LOS*
**LeaderOne Financial Profiled**

***LeaderOne Financial, Overland Park, KS, has selected Ellie Mae’s Encompass360 as its mortgage management solution. LeaderOne Financial was founded in 1992 by its CEO, A.W. Pickel III, a past president of the National Association of Mortgage Brokers. In 2011, the company originated nearly $500 million in mortgages through its retail loan officers and was named one of the fastest-growing private companies by Inc. Magazine (#12 in the nation among financial services companies). Here’s why they chose Encompass360:

****LeaderOne Financial evaluated nine loan origination systems (LOS) over a nine-month period before ultimately selecting Encompass360.

****“I was an industry consultant before joining LeaderOne Financial and had researched many LOS platforms,” said David Pearson, chief operating officer and executive vice president of operations for LeaderOne Financial and a 20-year mortgage-industry veteran. “What I always discovered is that if an LOS is strong on the front end, generally it is inefficient on the back end and vice versa. But Encompass360 is different –– it’s more evolved and able to perform on both the front and back end. What really tipped the scales were the controls, portability, reporting ability and compliance functionality that Encompass360 gives us.”

****Although his company is still in the early days of implementation, Mr. Pearson is already seeing the rewards. “With everybody working off the same page, no data gets lost, which means we can remain a paperless organization. Plus, Ellie Mae’s Success-Based Pricing model fits well into our organization,” he said.

****“Selecting an enterprise LOS platform and deciding on how you would like to pay for this technology are important decisions that require a great deal of research,” said Jonathan Corr, Ellie Mae’s chief operating officer. “Being selected by a discerning client like LeaderOne speaks volumes about the confidence they have in Encompass360 and the flexibility that Success-Based Pricing offers.”