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The Shifting Landscape

According to STRATMOR Group’s Senior Partner Nicole Yung, mortgage technology is changing. These observations were recorded in the firm’s 2017 Technology Insight Survey (TIS). Over the past three years, the TIS has become the mortgage industry’s go-to reference for unvarnished peer views on major commercial-off-the-shelf (COTS) loan origination systems (LOSs) relating to market share, overall satisfaction, functional performance, implementation experience and more.

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However, as Yung explained, while still an invaluable resource for LOS intelligence, the 2017 TIS has expanded to become a broad-based mortgage technology survey. “While there have been many significant advances in mortgage technology over the years, most of were focused on improving lender processes and productivity, not on fundamentally changing the borrower’s experience,” said Yung.

“But, as the publicity surrounding Quicken’s Rocket Mortgage and the Agencies’ stated commitment to Day 1 Certainty attests to, Digital Mortgage (DM) may well be a game changer that no lender can afford to ignore. Recognizing this, STRATMOR has expanded our TIS survey to include an entire new section addressing lender adoption of Digital Mortgage technology.”

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So, how is the mortgage technology landscape changing? “Today, we are in the midst of a technological shift that is fostering this new competitive paradigm, one that is driving how a consumer gets a mortgage and how a lender gets to the consumer. While most lenders think of DM solely in terms of the ‘how’ of customer interaction, STRATMOR’s functional view of DM extends to how a lender uses consumer/borrower data in its marketing activities. In this ‘sea-change’ environment, getting the right technology – and using it in the right ways – takes on special importance,” answered Yung.

“The new 2017 TIS is the only independent industry technology survey gathering crucial data on lenders’ experiences with their LOS and other origination systems in the context of DM as well as more traditional lending operations. At STRATMOR we view the TIS and report not so much as a product, but as an essential industry utility. It can only continue to serve this purpose if lenders participate, whether or not they buy the detailed TIS report.”

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Any resource that can help lenders better understand technology is welcome in my view.

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.

Integration Furthers eLending

PathSoftware today announced that Path, its configurable, multi-channel, cloud-based mortgage loan origination software (LOS), is now fully integrated with DocMagic, a provider of document production, automated compliance, and eMortgage services.

The new web integration provides a direct, secure connection between users’ loan files and DocMagic’s family of products and services. This enables users to order, generate, manage, receive and deliver TRID-compliant documents, such as loan estimates, closing documents and disclosures, with just a few mouse clicks—virtually eliminating the chance of errors and exposure to security risks, while avoiding the time constraints of manually rekeying information.

This integration also enables users to access DocMagic’s Total eClose platform, a digital mortgage solution that contains all of the components needed to facilitate a completely paperless digital closing. In addition, the integration also accesses DocMagic’s eSign technology so borrowers can electronically sign all documents in a secure, compliant manner.

Path was designed to simplify and streamline mid- to enterprise-level, multi-channel loan origination. All loan data, lock data, products, pricing, automated underwriting system findings, loan estimate and closing disclosure documents emanate and are reconciled within one system. In addition, the LOS’s configurable workflows, with role-based functionality, provide visibility into every loan at every stage—so financial institutions can ensure their business rules are followed.

“Smart companies like PathSoftware know that TRID compliance, risk reduction and cost control are huge concerns for lenders, and they’re building value by offering solutions to those issues through their technology and that of their partners, like DocMagic,” said Dominic Iannitti, president and CEO of DocMagic. “We’ve had an excellent partnership with PathSoftware’s parent company for many years. We’re proud to continue supporting them as they introduce new and better solutions to their customers and the industry.”

“DocMagic has long been a leading provider of fully-compliant loan document preparation solutions, differentiating itself by the way it handles data and runs compliance checks,” said Doug Mitchell, director of sales and support at PathSoftware. “Our integration with DocMagic will not only make ordering compliant documents significantly easier for our joint clients, it will also significantly reduce time and cost, and eliminate the need for data re-entry, which can inadvertently cause errors and lead to compliance issues.”

The PathSoftware LOS integration also gives mutual clients the option to take advantage of DocMagic’s Premium Reps & Warrants Guarantee offering. The guarantee covers high cost points and fees calculations, TRID-related audits, customer modifications of documents, document selection, and the Loan Estimate (LE) and Closing Disclosure (CD) under DocMagic’s SmartCLOSE product.

Progress In Lending
The Place For Thought Leaders And Visionaries

Ultimate Flexibility: Leveraging An Open API In Mortgage Tech To Bridge To Digital Lending

In any business, companies can only move as fast as the slowest part of the process. For mortgage lenders, the slowest part of the loan process – outside of regulatory mandated waiting periods – has often been the limitations of physical paper. Whether it is the printing, delivery and fulfillment of paper-based disclosures and closing packages or the transfer of data from a paper application to an underwriting system, manually completing any task dramatically slows down a lender’s efficiency.

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Along with the rest of the nation’s industries, mortgage lenders have spent the past two decades transitioning to a digital economy. In its truest form, digital lending refers to a lending process in which all parties conduct all steps of the loan process electronically. This encompasses everything from the initial application submitted by the borrower to delivery and servicing by the investor.

With the rise in consumer interest around conducting financial business digitally, it’s vital for lenders to embrace as much of the digital mortgage as possible. This paradigm shift requires that all documents undergo an entirely paperless closing process—or in other words, are signed, notarized, registered, delivered and stored electronically.

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While the mortgage industry is better positioned than ever to accomplish this feat, there are many other factors impeding fully-realized electronic mortgages from becoming the industry-wide standard. One of the biggest challenges is getting all the technology tools needed to process loans electronically working together. One approach that is helping lenders build the system of their dreams is leveraging an open API to simplify the task of integrating many excellent vendors into one efficient system.

Bridging to the Future with API

The foundation for a successful digital lending strategy is having the appropriate technological infrastructure. With the proper technology in place, borrower data seamlessly moves through each phase of the origination process, along with reducing the risk of human error.

Lenders need three main tools to build a fully digital lending workflow: an intuitive and responsive point of sale (POS) where borrowers can initially complete loan applications and manage their loan status; a loan origination system (LOS) to address all necessary verification and underwriting; and a document and eSignature provider for closing, delivery and servicing.

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Of these tools, the LOS is the foundation into which all other tools must integrate into. While some LOS providers try to offer every tool in one system, most lenders find that they prefer to build a custom tech environment that leverages the expertise and functionality of several different software providers.

This is where an open API becomes essential for the evolution to digital lending. When lenders select an LOS with an open API, they gain access to more resources that can enable them to streamline their lending process. Instead of waiting months or years for two vendors to reach an integration contract, build and code a proprietary integration, test and finally roll out the solution, vendors can instead use the API to build integrations more quickly and accurately using data standards provided by the LOS.

This choice creates an environment of competition where vendors are increasingly challenged to continue refining and improving their solutions to provide the best value for lenders. Lenders are also able to continue configuring their LOS’ long after the initial implementation, which is beneficial during period of growth or changes within the lenders organizations that promote new ways to lend.

This is vital for lenders as they move toward the primary goal of a complete end-to-end digital mortgage. An open Application Programming Interface (API) provides a more efficient and streamlined experience for both lenders and borrowers alike. Lenders will also have singular, standardized proof of compliance and be able to maintain a higher level of data integrity by significantly reducing manual data processing.

Along with time-efficiency, improved data integrity and transparency are additional benefits found in leveraging the appropriate technological tools. The increase in data integrity not only helps expedite the origination process, but also provides clarity on the secondary market. This technology helps both lenders and investor mitigate risk and ensures the loans initially meet the standards required for origination and servicing.

The bottom line is that electronic lending affords all parties involved a wealth of benefits. Lenders and investors who manage their loans electronically will be able to cut down significantly on the time it takes to originate and service these loans, enabling them to handle a greater volume and thus drive greater profits. Not only that, but they’ll be able to show their borrowers a better experience, making it more likely that these borrowers will return for future lending needs.

About The Author

Linn Cook
Linn Cook is senior communications manager of LendingQB, a leading loan origination software provider delivering customer solutions that combine technology and good business practices. LendingQB is a provider of 100% web browser-based, end-to-end loan origination software that offers residential mortgage banking organizations faster closing time and reduced costs per loan. To learn more visit www.lendingqb.com.

Point Users Can Access Lender’s Section 184 Loans For Native Americans

Calyx Point users can now access products and pricing information for 1st Tribal Lending programs, regardless of whether they have registered to broker loans with 1st Tribal Lending. 1st Tribal Lending is a division of Mid America Mortgage, a multi-state, full-service mortgage lender.

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1st Tribal Lending, which is licensed in 40 states, offers Section 184 home loans to Native Americans who are enrolled members of federally recognized tribes. Properties can be financed both on and off native lands, for new construction, rehabilitation, purchase of an existing home, or refinance.

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“In today’s competitive market, lenders are looking for new niche markets and programs to put their borrowers in homes,” said Bob Dougherty, Vice President of Business Development at Calyx Software. “This integration allows 1st Tribal Lending to increase its outreach to Calyx’s extensive user base, and, at the same time, provides all Calyx customers, even if they are not yet approved to broker loans with 1st Tribal Lending, access to the lender’s loan programs for Native American borrowers.”

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“One of the challenges of offering unique programs, like Section 184 loans, is marketing and educating brokers on the guidelines,” said Brett Robinson, Managing Director of 1st Tribal Lending. “We are excited to be integrated with Point to help brokers, and ultimately more Native American borrowers. Having easy access to our programs will open up more opportunities for purchases on and off the reservation, site built constructions, manufactured homes, and refinances.”

To access 1st Tribal Lending’s offerings in Point, select Product and Pricing from the Interfaces menu, select 1st Tribal Lending, and click 1st Tribal Lending.

Progress In Lending
The Place For Thought Leaders And Visionaries

PathSoftware Now Integrated With ComplianceAnalyzer From ComplianceEase

PathSoftware today announced that Path, its highly-configurable, multi-channel, cloud-based mortgage loan origination software (LOS), is now integrated with ComplianceAnalyzer with TRID Monitor from ComplianceEase, a provider of automated compliance solutions to the financial services industry.

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The seamless integration lets Path users automatically audit loans for regulatory compliance violations using ComplianceAnalyzer with TRID Monitor—without ever leaving the LOS. ComplianceAnalyzer with TRID Monitor is the most comprehensive, real-time TRID auditing solution available in the market. It can check for any changes in terms and fees throughout the origination and closing processes; audit tolerance across all disclosures and changed circumstances; and track post-consummation disclosures, including those with a cure to the borrower. In addition, ComplianceAnalyzer with TRID Monitor performs audits for Federal high cost and higher-priced loan regulations, the Secure and Fair Enforcement for Mortgage Licensing Act, state high cost and anti-predatory regulations, and state license-based consumer lending laws and regulations. It can also perform audits for compliance guidelines from secondary market investors and government-sponsored enterprises.

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Path was designed to simplify and streamline mid- to enterprise-level, multi-channel loan origination. All loan data, lock data, products, pricing, automated underwriting system findings, loan estimate and closing disclosure documents emanate and are reconciled within one system. In addition, the LOS’s configurable workflows, with role-based functionality, provide visibility into every loan at every stage—so financial institutions can ensure their business rules are followed.

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“We developed ComplianceAnalyzer with TRID Monitor to deliver in seconds comprehensive loan-level compliance reports supported by detailed regulatory and cure analyses, exception tracking and reporting,” said Dan Smith, Senior Vice President of ComplianceEase. “Our integration with Path will allow us to help more lenders improve efficiency, as well as give them greater confidence in the loans they’re originating.”

“Having the ability to automatically audit loans at every step in the origination, closing and post-closing process is vital in today’s ever-changing regulatory environment,” said Doug Mitchell, Director of Sales and Support at PathSoftware. “We’re pleased to partner with ComplianceEase to help our financial institution clients improve loan quality, reduce compliance risk, and capture the data needed to prepare for regulatory exams.”

Progress In Lending
The Place For Thought Leaders And Visionaries

Blue Sage Launches Multi-Channel Digital Platform

Blue Sage Solutions, whose founders created the mortgage industry’s first browser-based, end-to-end loan origination system, has launched a new Digital Lending Platform that now serves retail and wholesale businesses channels in addition to its existing correspondent lending capabilities. Available immediately, retail and wholesale lenders will be able to sell, manufacture and close loans online while offering borrowers a fast, efficient and user-friendly digital mortgage experience.

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The Blue Sage Digital Lending Platform Retail Portal enables borrowers with any digital device to shop, apply, and participate in the origination process. Retail lenders can now leverage Blue Sage’s consumer applications to enable borrowers to explore eligible products calculated with real-time rates, fees, and cost options that they can take directly into online application process. Meanwhile, the Blue Sage Wholesale Portal enables wholesale lenders to work more efficiently with brokers and banking partners, and deliver faster loan decisions in an automated and collaborative digital environment.

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“Unlike most platforms, Blue Sage was completely built and delivered through the cloud and designed to support any mortgage channel or line of business,” said Blue Sage CEO Joe Langner. “Retail and wholesale lenders no longer need to bolt-on third party add-on solutions through complex integrations, such as borrower websites or pricing engines into their existing LOS. Our platform provides lenders everything in one cohesive solution, so borrowers receive a simpler, more efficient experience from start to finish.”

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Blue Sage’s consumer applications streamline the user experience by offering full chat and remote assistance and automated workflows. After a borrower fills out an application, Blue Sage verifies pricing and compliance and delivers to the borrower a personalized portal to track their loan progress and receive access to the initial disclosure package ready for an electronic signature.

The Blue Sage Digital Lending Platform also includes an Originator Portal and Mobile App that provides key point-of-sale and CRM functionality to set up contact strategies, interact with borrowers, set goals and manage pipelines and performance. With Blue Sage, lenders can increase capture rates, react more quickly to market changes, ensure compliance, and meet borrower demands for a completely digital mortgage experience all on one seamless platform.

Langner added that the Blue Sage Digital Lending Platform can be easily updated with new products at no additional investment to lenders. “Blue Sage offers unparalleled flexibility through an ecosystem of API (application programming interface) services, which allows us to offer new products rapidly, such as our mobile Loan Officer Portal,” Langner said. “There’s tremendous value for lenders in having a complete solution designed from the beginning to bring all the pieces of the mortgage process together while reducing total costs of ownership.”

Progress In Lending
The Place For Thought Leaders And Visionaries

Innovating The Origination Process

Black Knight Financial Services, Inc. is a leading provider of integrated technology, data and analytics solutions that facilitate and automate many of the business processes across the mortgage lifecycle. The company is committed to being a premier business partner that lenders and servicers rely on to achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class technology, services and insight with a relentless commitment to excellence, innovation, integrity and leadership. To this end, Richard (“Rich”) Gagliano is President of the Origination Technologies Division for Black Knight, talked to us about how he sees the future of mortgage origination and what Black Knight is doing to innovate. Here’s what he said:

Q: What are a few of the most impactful changes you are seeing in the mortgage lending industry?

RICH GAGLIANO: The impact of regulatory change continues to plague the mortgage industry with higher operating costs. While the pace of regulatory change has slowed, mortgage lenders have not seen their costs decline accordingly. To put this in perspective, the average cost to originate a loan today is nearly double what it was in 2007. Still, we believe that in time technology and process innovation will help to normalize costs.

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Digital technology has and will continue to have a significant impact on the mortgage industry. From an operational perspective, it enables innovation that can result in greater efficiency, as well as expanded product offerings. It can also help deliver the “have it your way” experience that customers expect by enabling them to interact with their lender and receive updates on the mortgage loan process from any internet-connected device. This continuity of experience has become a standard expectation from consumers, and digital technology is helping lenders meet and exceed those expectations.

Q: What is Black Knight doing to help lenders address these changes?

RICH GAGLIANO: On the regulatory front, Black Knight has been at the forefront in terms of working in close partnership with our clients to ensure that we adapt and innovate to meet their changing needs as new regulatory measures unfold. As a result, we have a highly collaborative and productive working relationship with our mortgage clients, and are in lock-step with them to address regulatory changes when they arise.

We also deploy robotics technology within our core loan origination system to deliver advanced automation in support of more streamlined origination operations. This innovative approach enables mortgage originators to improve operating efficiencies and drive down costs.

Taking advantage of the capabilities of digital technology, Black Knight is delivering a front-end (consumer-facing) loan application that lenders can deploy so their borrowers can enjoy a user-friendly, branded experience. Data that is entered into the application is collected and tied back to our loan origination system for efficiency and speed.

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Q: In what ways are these innovations helping the lending industry evolve?

RICH GAGLIANO: Innovation is greatly helping to expedite the gathering and validation of borrower information through fintech companies for key factors such as income and assets. This accelerates the speed and fluidity of the origination process by giving lenders increased validation certainty to support decisioning.

In turn, this gives consumers the ability to self-fulfill the mortgage origination application online, without the need to track down supporting documents and other onerous tasks that can contribute to an unpleasant mortgage origination experience.

The result is not only a more satisfying customer experience, but also a lower abandonment rate, decreased costs to originate a mortgage loan, and the opportunity to approve and close more loans overall. This offers a critical advantage to mortgage originators of all sizes.

Q: Black Knight is perceived as a technology provider for larger banks; what is the company doing to support mid-market lenders?

RICH GAGLIANO: Today, Black Knight offers a pre-configured origination solution called Empower Now! that is sized specifically for the mid-market lender. Empower Now! delivers all the functionality a mid-market lender needs, including automation capabilities and a process orchestration engine that helps support a lender’s future growth. It enables lenders to operate more efficiently and deliver a more responsive customer experience.

The system can be deployed within 4-6 months – more quickly than our robust Empower enterprise system. Additionally, Empower Now! scales to support future growth, so mid-market lenders don’t have to settle for less robust options because of their size.

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Q: How has your previous experience in the mortgage industry prepared you as President of Black Knight’s Origination Technologies division?

RICH GAGLIANO: My industry background has included both mortgage origination operations, as well as technology strategy and development. I have run mortgage origination businesses, including executive management, sales, and operations. This has given me a good understanding of the challenges associated with the origination business, including cost and margin management. I’ve also spent many years working as an underwriter, as well as in corporate finance and secondary marketing. I also have experience in business engineering, helping to identify opportunities for operations to be more efficient across people, technology, and processes. Finally, I have a great deal of experience in regulatory and compliance, and have been working closely with our mortgage clients on their readiness initiatives and risk mitigation programs.

Insider Profile

Richard (“Rich”) Gagliano is President of the Origination Technologies Division for Black Knight, a leading provider of integrated technology, data and analytics solutions that facilitate and automate many of the business processes across the mortgage lifecycle. As the division’s leader, Rich is primarily responsible for the direction of LoanSphere Empower, Black Knight’s loan origination system for retail, wholesale and consumer-direct channels; LoanSphere LendingSpace, Black Knight’s loan origination system for correspondent lending; Black Knight’s LoanSphere SalesEdge lead management solution; and LoanSphere Quality Insight, a quality control workflow solution that supports greater loan transparency and data integrity. With more than 25 years of experience in the financial services industry, Rich offers a wide range of lending-product knowledge and insight. He supports Black Knight’s efforts to provide advanced, high-performance technology and data solutions to help clients succeed in the evolving mortgage industry.

Progress In Lending
The Place For Thought Leaders And Visionaries

Higher Rates Did Not Deter Millennials

Summer temperatures and higher rates appeared to have little effect on the Millennial homebuying market, according to August data from the Ellie Mae Millennial Tracker. Conventional loans remained steady at 64 percent of all closed loans by this generation, while FHA mortgages stayed at 32 percent—a market share they have held since June. The average loan amount for loans closed by Millennial borrowers in August of 2017 was $185,919, a slight increase from August 2016’s average $184,113, despite the average 30-year note rate having increased to 4.211 percent from 3.706 percent last year.

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In August 2017, the average Millennial primary borrower was a 29.4-year-old who took out a Conventional loan of $185,919 to purchase a home with an average appraised value of $223,882. This average homebuyer had a FICO score of 724, which helped them get a 30-year note rate of 4.211 percent, and they closed on their home in 44 days. The majority (64 percent) of primary borrowers were male. Additionally, more than half (52 percent) of borrowers were married.

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On the West coast, the average Millennial borrower was slightly older, at 30.6 years old, taking out a loan of $314,579 on average. Average loan amounts were lower in the Midwest, with homebuyers of age 29.5 closing loans averaging $158,584 in Kansas, for example. In Hawaii, borrowers of 31.4 years took out loans averaging $396,766.

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Overall, Millennials were most likely to close loans for the purpose of purchasing a home (87 percent). Refinances accounted for 12 percent of loans closed by Millennials in August.

“Average loan amounts in August of this year were slightly higher than last year, despite higher interest rates,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “As tends to happen with tight inventories, this is a seller’s market, and many of today’s homebuyers may be faced with paying a premium for the same home they might have bought for less last year. For those who are committed to buying a home, though, slight increases in competition, costs or interest rates will likely not deter them.”

Other key findings from the August 2017 Ellie Mae Millennial Tracker include:

The top five markets where Millennial borrowers represented the highest percentage of homebuyers in August were Lima, Ohio, Batavia, N.Y., Dyersburg, Tenn., Roswell, N.M., and Kendallville, Ind.

Female homebuyers increased their purchase power, with closed loans in August averaging $189,574, up significantly year-over-year from $184,094. Males took a slightly smaller jump, averaging $196,246 in August 2017, versus $194,913 last year.

The metropolitan region with the largest percentage of female homebuyers (63 percent) was Mankato, Minn., with an average loan amount of $136,597 and average borrower FICO score of 723.

Males made up 60 percent of the Millennial market in Lima, Ohio, with loans averaging $86,845 and averaging borrower FICO scores coming in at 725.

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass all-in-one mortgage management solution.

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.

Robots In Mortgages

When you think of robots, what comes to mind? Many of us picture human-like machines such as Robby the Robot, C-3PO and R2D2, or even the robotic vacuum cleaners that are prevalent today. But not many of us are quite as aware of software robotics that are emerging, helping to automate business processes. It has been said that robots are the future of mortgage automation. Specifically, robotic process automation (RPA) software tools are helping with efficiency throughout the lending lifecycle.

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Robots were created to eliminate the human operator, saving on labor costs. Another benefit is the speed at which systems can be deployed. In some cases, these “bots”, as they are known, can be deployed via configuration tools without any additional programming. This decreases overall time to market for new automation and it becomes more of a business-enabled event to make changes versus an IT-event that goes through rigorous change processes and deployment cycles. A number of players in the market offer chatbots and virtual agents to interact with humans.

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And what if we could accurately predict when a specific loan needed an additional fraud check based on certain parameters? With newer RPA tools, specific, repeatable processes like QC and appraisal ordering can be automated even further than they are today. Many systems have had rules engines and automated service orders for quite some time. RPA can leverage disparate and unstructured data sources to determine proactive process changes for a specific loan scenario. Ultimately, overall error rates can be brought to zero with any task that would leverage RPA.

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Machine learning techniques in conjunction with RPA, workflow management and load balancing can all become much more sophisticated as well. SLAs can be monitored in real time and adjusted accordingly for a given situation, thereby reflecting the complexity and size of any given task. Today, in most cases, a person has to change the SLA for a given work item manually. Using RPA, your knowledge workers can focus on more strategic items and only deal with the loan cases that require exception handling according to the loan parameters.

Another key area that RPA can be used for is the whole concept of RegTech. With constant changes to laws, guidelines, and rulings, and data that exists across multiple, disparate systems, RPA can ensure that customer, property, and other key data is available at the right place at the right time. In fact, data from origination, servicing, and core banking platforms along with data from other non-traditional sources like social platforms can help refine risk models to apply in a given situation and ensure full compliance with all applicable laws.

I’ll leave you with one final thought. PWC estimates that up to 38% of existing U.S. jobs are susceptible to AI and RPA by the early 2030s, but the nature of what humans do will change versus their roles disappearing altogether. RPA provides a level of automation that few companies have experienced as of yet. It allows lenders to become much more predictive and proactive to customers’ needs and wants via anticipatory models versus reactive as is the case in a number of operations today. Instead of replacing humans, RPA allows more focus on customer experience enhancements and strategic changes, improving the overall lending experience while gaining huge efficiencies and cost savings.

About The Author

Joey McDuffee
Joey McDuffee is director at Wipro Gallagher Solutions, a Wipro Ltd. company (NYSE:WIT), which is a provider of end-to-end technology products and services for mortgage, consumer, and commercial lenders in the United States and abroad. WGS’ technology products include its flagship NetOxygen Loan Origination Systems (LOS) and mobile lending technologies. For more information about Wipro Gallagher Solutions, visit the company’s website at www.wiprogallagher.com.

Parsing The Data

While STRATMOR has always been a strong proponent of lenders using internal performance data to manage and improve their performance, according to senior partner Dr. Matt Lind, it is only by comparing peer-to-peer performance, i.e., benchmarking, that lenders will gain the most accurate and useful assessment of their competitive performance.

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“Mortgage lenders have utilized virtually the same metrics to assess performance for the past 30 years,” said Lind. “Considering how dramatically our market has changed during this time, STRATMOR felt it necessary to enhance the way lenders can measure performance versus peers. The result is a new approach, one based on a substantial lender-level data that enables lenders to place the efficacy of their operations in the context of peer performance on the same characteristics.”

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Lenders can apply STRATMOR’s new method for benchmarking production or servicing performance to virtually any traditional performance metric, from direct production margin and direct origination expense per loan to loans serviced per servicing FTE and more.

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“With common benchmarking comparisons, lenders are only able to make comparisons to the averages,” Lind continued. “This leads to statements like: ‘My direct retail origination expense per loan is $200 less than average,’ but with our new method, lenders can now determine how a value measures up or down in terms of standard deviations from the mean. The new method enables lenders to better judge performance, which is reflected in statements such as: ‘My direct retail origination expense per loan is equal to or better than 62 percent of lenders.’ The understanding gathered from statements like the latter are much more meaningful to our clients than the understanding derived from internal comparisons alone. The bottom line is that it is significantly more valuable for lenders to be able to measure against peers, rather than to simply measure against internal metrics.”

STRATMOR also details select findings from its 2016 LOS Technology Insight Survey (TIS), specifically, lenders’ opinions on the efficacy of functionality in their respective Loan Origination Systems (LOS). Less than 25 percent of lender participants indicated that the compliance tools in their LOS were ‘Highly Effective’ and afforded them a competitive advantage. Between 40 and 50 percent of participant lenders rated their LOS’ compliance functionality as ‘Adequately Effective.’

Additionally, STRATMOR’s TIS findings show ‘Lead Generation/Management’ as the lowest rated functionality. Only four percent of lender participants stated that their LOS provided ‘Highly Effective’ lead generation capabilities. ‘eSignature’ and ‘Product/Price/Eligibility Decision Engine’ capabilities were also among the lowest rated for effective functionality. A continued lack of functionality satisfaction in these important capability areas will most likely drive lenders to seek alternatives.

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.