Not The ROI You Expected?


Are you achieving the operational efficiency gains and ROI expected from the document management tool included with your loan origination system (LOS)?

In today’s highly competitive mortgage market, lenders are forced to deal with rising costs to originate loans, the need to minimize risk, and are compelled to respond to constantly changing regulations. This puts intense pressure on lenders to seek out ways to gain efficiency while reducing costs and minimizing risk.

Featured Sponsors:


The right document management and delivery solution automates business processes throughout every step of the mortgage lending process, resulting in increased operational efficiency and enterprise-wide cost savings.

To respond to this need in the marketplace, many LOS providers have private labeled or bolted on document management tools to their LOS, but expectations don’t always match reality. While this was often done to “check a box” on a RFP and appease lenders, many lenders quickly realized that what they were getting from their LOS-provided document management tool did not provide the efficiency and competitive capabilities they had hoped for.





Many LOS providers have private labeled or bolted on document management tools to their LOS, but expectations don’t always match reality.

Not all document management and delivery solutions are created equal, nor do they provide the same level of ROI.

LOS providers have a hard enough time maintaining their core technology and meeting constantly changing regulations and delivering advancements to the LOS. As a result, most LOS providers fall short in delivering document management capabilities that yield high levels of efficiency.

On the other hand, an independent document management company solely focuses on what it does best, which is to develop and provide innovative, feature-rich enterprise document management and delivery solutions that incorporate best practices and years of experience. As a result, operational efficiency gains and ROI are delivered throughout the entire mortgage operation and beyond.

Featured Sponsors:


Not all document management and delivery solutions are created equal, nor do they provide the same level of ROI. When comparing document management solutions, let’s look at a number of key features that will impact your ability to maximize cost savings, minimize risk across the organization and produce the greatest efficiency gains.

Let’s start with the ability to quickly and precisely deliver loan files and data electronically to investors, HUD for FHA insuring, servicers, subservicers, QC firms and MI companies.

LOS-provided systems require lenders to create and manage their delivery “bundles” which takes time to set up, adding manual work to the back office staff.  In addition, many LOS-provided systems do not include one-click delivery; instead lenders have to create a PDF “bundle” for each loan and then upload the PDF. This creates multiple unneeded steps, is more error prone and creates inefficiencies in the process.





Lenders that take the time to explore the benefits of independent document management and delivery solutions realize significant efficiency gains.

The right independent document management and delivery solution includes an integrated electronic loan delivery application.

The right independent document management and delivery solution includes an integrated electronic loan delivery application with the following capabilities:

>> Preconfigured delivery profiles that meet each recipient’s specific requirements and desired stacking order.

>> Secure, one-click delivery to each recipient’s server.

>> Notifications and alerts when required documents are missing.

>> Ability to preview loans in the recipient’s stacking order prior to delivery.

>> Real-time delivery status monitoring and audit reporting.

>> Single loan or bulk loan delivery.

These must-have capabilities maximize lenders’ secondary market execution and significantly minimize suspense issues and lock expiration penalties.

Another area that is typically lacking in the LOS-provided system is the use of optical character recognition (OCR) to automate document identification and indexing. The right independent document management solution leverages integrated, full text OCR of structured, semi-structured and unstructured documents.

Featured Sponsors:


In addition, lenders can request an independent document management provider to “train” their unique, custom documents and program-specific documents so the OCR technology can correctly identify and file the documents. This eliminates time spent by lenders’ staff repeatedly naming and indexing their unique documents.

Another point of differentiation is LOS-provided systems typically have limited methods for document upload and capture. The right independent document management and delivery solution provides multiple methods for document upload and capture, including drag and drop, virtual printing, email tools, web portals and automated batch import of documents (e.g. appraisals) to all participants in the loan lifecycle, saving lenders time and money.

Many LOS-provided systems have a narrow set of acceptable file formats. Whereas, the right independent document management solution provides support for a wide array of file types that can be stored in their native format.

The advantages don’t end with the superior functionality provided by the right independent document management solution. For LOS-provided systems, the story usually ends with residential lending.  But if you truly want to experience increased operational efficiency and enterprise-wide cost savings, shouldn’t the use and functionality of document management technology extend to all lending areas and business processes within the financial institution?

Enterprise use of an independent document management and delivery solution supports any paper-intensive process and can be used for Servicing, Commercial Lending, Consumer Lending, Human Resources, Accounting, Policies and Procedures, Marketing, and Contract Management to name a few.

In addition to the numerous examples that have been discussed to help you make a more informed decision between a LOS-provided document management system and a “best of breed” independent document management solution, here are some additional big picture items that significantly impact your risk and long-term efficiency gains.

When viewing this decision holistically, it is critical to understand the impact that working with a provider whose core competency is LOS technology vs. Document Management.  Which provider has the knowledge, expertise, and experience to truly deliver the cost savings that document management can provide to your entire organization?

When the technology being used was not created by the LOS, but instead is private labeled vs. being created by the independent document management and delivery solution, who is better able to provide superior customer support?

Who is better equipped to make needed and timely updates to the solution?  Which provider is solely focused on the document management solution vs. which provider is trying to implement all the regulatory changes required in the LOS and doesn’t have time to make document management enhancements in a timely manner?

In today’s mortgage market, speed, operational efficiency, and access to information is critical, especially when responding to changing market conditions while trying to gain a competitive advantage.  Therefore, performance and speed should factor into your document management decision.  Many SaaS LOSs slow down or bottleneck at certain points during the day or most critically, at month-end.  What impact will this have on your productivity and business?

What happens if/when you replace your LOS? In fact, this happens quite often according to the STRATMOR Group, which shared highlights from its 2016 LOS Technology Insight Survey, gauging lender satisfaction with their loan origination systems (LOS). As Senior Partner Dr. Matt Lind explains, “despite the incredible operational disruption that comes hand in hand with a system change, 30 percent of lenders said they were not satisfied with their LOS, an increase from 28.7 percent in 2015. Of these, 19 percent are actively seeking a replacement for their current system and 11 percent are already in the process of implementing a new LOS, regardless of the fact that such a change can consume significant resources and disrupt an otherwise thriving mortgage origination platform.”

If your document management system is tied to the LOS-provider, when you change your LOS, you also will have to completely replace your document management system and processes adding significantly more disruption and definitely more cost. Some companies experience hostage type negotiations just to get their loan data.  Consider that headache doubled if you have to negotiate for your digital loan files as well.

If you change your LOS, and your independent document management and paperless process remains the same, you will experience significantly less change management, little to no disruption to mortgage operations and greatly mitigate organizational risk.

Lenders that take the time to explore the benefits of independent document management and delivery solutions realize significant efficiency gains and increased ROI, while simultaneously enhancing their ability to mitigate risk.

About The Author

VirPack Strategy Offers Lenders More Immediate ROI

The name of the game is return on investment. The vendor that can offer lenders the fastest and most sustainable ROI will become a market leader. To this end, VirPack, a provider of document management, imaging and workflow solutions, has launched “Preconfigured” Document Management and Delivery System (DMDS), which enables rapid deployment delivering immediate operational efficiency gains and ROI throughout the loan lifecycle.

Featured Sponsors:


VirPack’s preconfigured methodology ensures that each lender’s deployment is swifter and more streamlined, unlike traditional document management rollouts. By leveraging VirPack’s preconfigured document management software, lenders can quickly automate business processes throughout every step of the mortgage lending process while supporting retail, wholesale and correspondent lending operations.

Featured Sponsors:

With traditional or LOS-provided document management implementations, the burden of creating and managing electronic loan delivery profiles has been placed squarely on the lender. By utilizing the preconfigured implementation methodology, this major pain point is eliminated. Lenders can immediately deploy one-click electronic loan delivery that improves secondary market execution and significantly minimizes suspense issues and lock expiration penalties.

Featured Sponsors:

“Our previous document management provider notified us that they were sunsetting their product. Due to our growth and other high priority projects, our staff had limited time and resources to implement a new document management solution in time for our busy spring home buying season,” said Jill Quinn, executive vice president of operations at Philadelphia Mortgage Advisors. “We selected VirPack for their experience, advanced technology and preconfigured methodologies based on best practices that enabled us to gain immediate ROI and provided operational efficiency with the goal of closing more loans with existing staff.”

The combination of VirPack’s preconfigured methodology and advanced technology significantly reduces the cycle time from origination to closing. As a result, lenders will gain increases in production and operational efficiencies, resulting in better service levels. These better service levels improve customer satisfaction, attract and retain talented operations teams and grow realtor and builder relationships.

“Historically, with traditional or LOS-provided document management implementations, the process has been extremely taxing on lenders due to its time consuming and resource draining nature” said Cy Brinn, president of VirPack. “By utilizing VirPack’s preconfigured implementation methodology and advanced Document Management and Delivery System (DMDS), lenders can immediately reduce their dependency on paper, generate greater operational efficiency, increase productivity, facilitate collaboration and improve customer and staff satisfaction.”

Lenders that implement VirPack’s preconfigured document management methodology can readily turn their focus to leveraging additional DMDS capabilities that further optimize their operations including: automated document recognition and indexing using optical character recognition (OCR), rule-based workflow and tasking, customizable web portals for third party originators and borrowers and deeper integrations with other technology partners.

Technology Does Offer ROI

When used correctly, technology does pay off. For example, Alterra Home Loans, an independent mortgage bank headquartered in Nevada with offices in 12 states, has been able to sustain significant growth since implementing  Advantage Systems’ Accounting for Mortgage Bankers (AMB) software.

Featured Sponsors:


Alterra Home Loans selected AMB as its accounting system in 2015 in order to eliminate manual processes and gain access to detailed loan-level reporting tools. Alterra Home Loans has leveraged AMB’s automated processes to eliminate time-consuming manual entries during the lender’s rapid growth.

Featured Sponsors:

Alterra Home Loans is also taking advantage of Advantage Systems’ Commissions Calculation module in order to automate its commissions process, to provide loan officers with more timely and accurate commissions statements.

Featured Sponsors:

“Alterra Home Loans is going through a period of explosive growth and we made the decision to implement AMB in order to eliminate manual processes,” said Yvonne Yacono, chief business officer at Alterra Home Loans.

“We understand lenders’ needs, and have developed our software to eliminate time-consuming processes and help achieve growth,” said Brian Lynch, president of Advantage Systems. “We constantly seek to enhance our software’s features in order to help lenders attain tomorrow’s goals today.”

AMB is a robust accounting system that was specifically designed for mortgage bankers. The solution brings real-time accounting data to users, both accounting and non-accounting staff, in a practical, useable format. Key features include the ability to view loan level data that displays profitability by loan, loan type, loan officer and branch.

About The Author

Five Reasons To Implement MBI In 2015

July is always an interesting month. After the holiday weekend, things take a few days to get revved back up again. Once they do, many are startled to find that we’re on the downhill side of the year already. It’s the third quarter, and before long the holidays will be upon us. This realization generally brings about a mad scramble for business that seems to eclipse the ability of most lenders to do much else for the balance of the year. The last thing on anyone’s mind is another technology initiative.

Believe it or not, this is the perfect time to implement mortgage business intelligence (MBI). Here are the top five reasons why it’s not too late to consider supercharging your analytics with MBI this year.

Featured Sponsors:

[huge_it_gallery id=”2″]

Time to Benefit

With the advent of prebuilt solutions to the MBI marketplace, time to benefit is no longer a concern. I’ve seen MBI installations that take less than a week to configure, and more importantly didn’t require more than three to five man hours of participation on the part of the lender. The ensuing consulting and training shouldn’t require more than three or four hours of anyone’s time during any given week, and process time saved after the first month should more than offset this minor time investment.


This may be one of the best reasons to implement MBI now if you haven’t already. Compliance with TRID demands that lenders tighten up their processes to an unprecedented degree, and nothing delivers efficiencies faster than MBI. You can also set up email alerts to notify participants if loans slow down and are at risk of missing critical compliance deadlines.

Featured Sponsors:

[huge_it_gallery id=”3″]

Q4 and 2016

If you were to implement MBI during Q3 2015, you’d be in a position to optimize your fourth quarter, traditionally the slowest quarter of the year. You could also set new records in 2016. I interviewed a lender at the end of October 2014, the first year his organization had been up and running with MBI. He reported that 2014 was already his best year ever in terms of both funded volume and profitability.

Return on Investment

Another clear reason to launch MBI sooner rather than later is that it’s still new enough to be unusually inexpensive. Compare the pricing for MBI with similar platforms in other industries. If you’re looking at best of breed systems that offer both prebuilt solutions and an easy to use customization toolset, the price difference is quite striking. But as MBI gains traction in this industry, prices won’t be this low for much longer.

It’s fun!

Words like “fun”, “exciting”, or “inspiring” aren’t generally used to describe the mortgage industry, but I’ve seen firsthand the effect that MBI can have on corporate culture and organizational dynamics. MBI is all about changing perceptions and behaviors by shifting mindsets from task oriented to goal oriented thinking, and working with the end in mind is a well-known method for becoming more effective and successful. As people become more effective and successful in any setting, the flow of positive energy is an inevitable and welcome side effect.

About The Author


LOS Study Seeks To Quantify ROI

Technology return on investment is often mercy and hard to quantify exactly. To fill this void, Ellie Mae has commissioned an independent ROI Benchmark study conducted by MarketWise Advisors, LLC, which showed that Ellie Mae’s Encompass LOS provided as much as $970 of potential savings and value per loan. Conducted during the fourth quarter of 2014, the study measured results from actual Ellie Mae clients and found the savings came from a number of areas, including reduced origination costs, improved operational efficiencies, and increased loan quality and compliance. Here’s the scoop:

Specific findings from the study show that Encompass provides up to $970.14 potential savings and value per loan comprising $612.83 of improved asset quality and execution potential per loan and $337.31 of improved efficiencies and cost-savings potential per loan.

Featured Sponsors:

[huge_it_gallery id=”2″]

MarketWise Advisors was commissioned by Ellie Mae to analyze the financial performance and ROI of Encompass. The study evaluated and analyzed both the potential ROI achieved through Encompass as well as the performance value of its integrated, on-demand services: Encompass Compliance Service, Encompass Product and Pricing Service, Encompass Docs Solution and the Ellie Mae Total Quality Loan (TQL) program.

The MarketWise Advisors’ ROI study found that Ellie Mae clients using Encompass benefitted from improved compliance, loan quality and efficiency, and realized a strong ROI. Results indicated widespread, quantifiable benefits for existing and new clients, including significant, measurable competitive advantages such as a reduction in origination costs; improved operational efficiencies, loan quality and compliance that led to improved bottom-line profitability. The Ellie Mae clients that participated in this study represent diverse lending entities, origination channels, geographies and business structures.

Featured Sponsors:

[huge_it_gallery id=”3″]

“This study was uniquely comprehensive in its depth and nature,” said Jordan Brown, CEO of MarketWise Advisors. “The financial impact of Encompass was the remarkable lesson of this study, with compliance management and data transparency playing the strongest roles in the solution’s ability to build value and deliver net-income impacts.”

To download the complete study, please visit

Lender Gets Results From LOS

A lot of time we hear horror stories about how lenders hate their LOS. However, it’s important not to generalize. Some lenders are very happy with their existing systems. For example, Denali Alaskan Federal Credit Union, one of Alaska’s oldest credit unions, is very satisfied with the systems workflow and ease of use of Encompass, Ellie Mae’s mortgage management solution. The credit union has also achieved a higher completion rate of online mortgage applications since implementing Encompass last year. Here’s what happened:

Founded in 1948 and based in Anchorage, Alaska, Denali Alaskan Federal Credit Union serves more than 60,000 current and former Alaskans with offices in Anchorage, Eagle River, Fairbanks, Kenai, Juneau, Wasilla and most recently, Kent, Washington. The third largest credit union in Alaska and a pioneer in online banking, the credit union sells $80 million in mortgages per year with an average loan size of $250,000.

Featured Sponsors:

[huge_it_gallery id=”2″]

According to company officials, Denali Alaskan began looking for a new mortgage platform in October 2012 after growing concerns about its ability to stay compliant with new mortgage industry regulations. The credit union selected Ellie Mae’s Encompass after a lengthy search in March 2013 and implemented the all-in-one mortgage management solution in January 2014.

“Compliance is a growing issue not just for us, but for all credit unions,” said Jim Picard, CMB and vice president, Home Loans of Denali Alaskan Federal Credit Union. “Our correspondent investors are very stringent when it comes to clean loan files. Since we moved to Encompass, we have had no repurchases or buybacks. Ellie Mae’s focus on compliance allows us sleep well at night.”

Featured Sponsors:

[huge_it_gallery id=”3″]

From January 2014-March 2015 Denali Alaskan saw a 58 percent increase in the rate of completed online mortgage applications submitted by borrowers. Encompass also helped Denali Alaskan transform its mortgage business into a paperless operation, allowing more efficient work flow in origination, processing, underwriting, closing, shipping and quality control.

“Rather than grabbing paper files and standing at the copier for an hour, we are taking files right out of Encompass and moving them anywhere they need to go electronically,” Picard said. “Our old file room has an increasing number of empty shelves. The space will eventually be converted into an additional loan origination office.”

“All lenders are concerned about compliance, including credit unions, and many of them are looking to Ellie Mae for answers,” said Jonathan Corr, president and CEO of Ellie Mae. “In an era of ever-increasing regulations and tighter investor guidelines, including new RESPA-TILA changes coming this year, it’s reassuring to know that no other mortgage technology provider has invested as many resources as we have to keep credit unions safe while saving them money.”

About The Author


Return On Your MBI Investment

Now that business intelligence has a foothold in the mortgage industry, we’re starting to hear more and more questions about return on investment. How do you know if you’re getting your money’s worth? How much should mortgage business intelligence (MBI) cost? Is the system paying for itself in increased revenue, or are you losing money?

Let’s be honest: the mortgage industry has always struggled with detailed cost analysis. I’ve talked to a number of lenders about how they analyze cost per loan. Many take aggregated quarterly or yearly totals from their accounting systems and then simply divide them by the number of closed loans in that period. Some don’t even go that far, literally shrugging off unit labor cost figures as unobtainable.

Featured Sponsors:

[huge_it_gallery id=”2″]

But are they? Are loan level costs really that mysterious? Anyone that’s worked in loan operations understands this viewpoint. The journey of a loan file through operations is rarely linear, and the number of touches on a file and the time elapsed between touches is nearly impossible to track. You might be able to track a single file or group of files, but tracking them all consistently and accurately has been impossible until the advent of MBI.

MBI systems have finally given us the functionality necessary to closely track the lifecycle of each and every loan in a given pipeline. Imagine not only being able to quickly and consistently identify your most labor intensive loans, but also to easily trace common characteristics to find the source of these files such as a particular loan program, branch, or loan officer. You’ve just found an opportunity for pinpointed training and process improvement, or a strategic shift in product mix, either of which can reduce loan level costs.

Featured Sponsors:

[huge_it_gallery id=”3″]

I recently had lunch with Todd Pierson, founder of The Mortgage Firm. He explained the return on his MBI investment this way: “It’s improved our ability to work. I don’t have to interrupt people anymore to get information. We have great workflow, good energy, and my key people are working in highest and best use mode all the time, without having to get distracted. How do you put a price tag on that?”

Any good technology provider will have a value assurance model, and superior MBI systems will include prebuilt dashboards and reports to monitor loan level costs using “field auditing” or “audit tracking”. This is the ability to track how and when a given data field has changed and who changed it, giving you a complete history of the values that have been entered into that field during the loan file’s lifecycle. These field histories provide the necessary data points to paint a much clearer picture of loan level costs.

If you’re looking for a simpler formula, ask yourself how many additional loans MBI is helping you close each month. If you’re closing a dozen or more additional loans per month with MBI, revenue from the first two or three of these should cover the cost of a well-priced MBI system.

About The Author


Lender Increases Production With Technology

It’s always good when technology pays off. For example, South Carolina-based AllSouth Federal Credit Union (AllSouth) completed 58 percent of its mortgage applications through Mortgagebot Advisor after just two months of going live with the Web-based solution.

Having used D+H’s MortgagebotPOS platform for years, most of AllSouth’s mortgage loan volume comes through its self-serve, online channel. To further enhance efficiency and member service, the credit union recently decided to enable its branch and call center staff to take mortgage applications as well. After adding MortgagebotPOS Advisor (though opting to not utilize the product and pricing engine as a way to best fit its needs), the institution quickly saw a significant boost in volume.

“I was delighted at the level of production after just one month,” said Thomas Boswell, vice president of mortgage lending, AllSouth Federal Credit Union. “MortgagebotPOS Advisor gives us the best of both worlds. We utilize our branch network to add convenience and provide better service to our members, but leave the in-depth mortgage discussions and analysis to staff members who are fully trained in this area of speciality.”

Using MortgagebotPOS Advisor, AllSouth captures walk-in and call-in business because more employees are equipped to collect the application data without being formally trained or experienced in mortgage lending.

From a convenience perspective, Boswell explained, MortgagebotPOS Advisor is a ‘win-win’ for AllSouth. “The applications come in electronically, so the solution eliminates the manual paperwork and re-keying typically generated by staff members collecting data. Our staff has remarked that they can’t believe how easy it is to use. Additionally, the great service we get from D+H is a key differentiator for us over competitors.”

The benefits AllSouth is seeing span beyond its staff. Having the additional branch and call center capabilities also equips the credit union to better serve its member base – regardless of the channel from which they initiate the mortgage loan process.

“We are thrilled to see the impressive results AllSouth is experiencing with MortgagebotPOS Advisor,” said Scott Hansen, senior vice president of marketing, D+H. “In this digital era, this example reaffirms the need for financial institutions to remain committed to offering the same services across multiple channels and touch points. We believe a channel synchronization model is critical to ensuring a superior member experience, while maximizing opportunities.”

Mortgagebot is a key component of D+H’s end-to-end lending platform and provides solutions for automating loan applications, pricing, approvals, disclosures, as well as processing, closing, imaging and secondary marketing.

Technology ROI Is Clear

I go on and on about technology return on investment all the time. But really technology ROI is very clear. For example, Brookfield Global Relocation Services (Brookfield GRS) anticipates an annual costs savings of more than $1 million from its implementation of TransCentra’s enterprise content management (ECM) solution. ECM will enable Brookfield GRS to significantly reduce expenses associated with paper handling, courier and storage costs as well as labor costs for manual data entry and paper document retrieval and filing.

Brookfield GRS is a global service provider of corporate and government relocation and assignment management services to more than 500 clients. When Brookfield GRS acquired a competitor, Prudential Relocation Services, with an existing ECM solution, it was forced to find an immediate solution to avoid facing additional fees for using the system. Brookfield GRS was impressed with TransCentra’s ability to complete the conversion in just four months, meeting its necessary timeframe and providing a solution to manage everything from supplier billings to customer expense claims to home sale documents.

“Our business is one that relies heavily on documents, and when relocating people – often around the world – sending and storing paper is a huge expense,” said Rod McLeod, vice president of IT for Brookfield GRS. “TransCentra exceeded our expectations at the onset by its ability to meet our four month conversion deadline, allowing us to avoid incurring additional fees on the incumbent system. We expect the cost savings from eliminating paper to be dramatic, and in addition to positively impacting our bottom lines, having all documents in a digital format will allow us to easily access information at any time.”

Brookfield GRS currently uses TransCentra’s ECM solution primarily in its accounting department and is working to ensure the system applies to any document involved across all client services and accounting activities. The company plans to expand its relationship with TransCentra in the near future to optimize other areas of its business such as legal, human resources and IT.

More lenders need to get this message.

About The Author


Watch Much TV These Days?

What makes a television show stretch on for years and years? The ratings of course, the ROI of television. Did you know that Seinfeld was almost not renewed for a second season? It did not have substantial ratings—the financial numbers to justify the investment. Luckily there was a studio visionary that saw the intangible of “something promising in the future” and took a risk and continued to invest despite the ratings. As they say the rest is well, yada, yada.

Today’s economic environment has forced companies to make technology investment decisions on the financial numbers with an expectation of return in the first season. How many Seinfelds has your company canceled, or better yet never even premiered? ROI should be a combination of financial data and risk analysis. So what cast of characters need to be engaged to create a technology winning series in today’s ever changing mortgage market? I’ll tell you.

Everyone assumes the “easy part” of the ROI analysis is the financial data. If only it was that simple. Most companies struggle with assessing a specific process and its associated cost. While companies track “operational” expenses there is little data associated to a specific process. How can one really measure savings assuming a technology investment is about a better, faster, less expensive process when the baseline data is not available or inaccurate? In addition there is typically a lack of data around the actual “ business process.” This type of data represents the analysis of cycle times, conversion rates, and the exception process. The first re-write in producing a technology winning series occurs when there is basic information that is not available—one must know the current process and cost in order to make future technology investment decisions.

There are so many pieces to the mortgage process and they’re all so disjointed it’s hard to put a cost on any one process. That all changes in an automated world. It’s easier to associate a cost with an electronic process because you can track that process from start to finish. For example, disclosures in the paper world are delivered via regular mail, priority mail, email, courier, fax, etc., which gives you several different points of origin for that transaction. There also could be several different inputs of data based on the output option. How do you quantify cost there? In an electronic process you know down to the second about when the disclosure package was created, sent, received and signed. That is almost impossible to track in a paper world.

So let’s look at the risk analysis portion of the ROI. What are those intangible risk factors? Compliance. A winning series that addresses compliance before a problem has occurred will be sure to bring in the ratings. In an automated process there is less risk of not meeting certain compliance requirements due to better tracking and audit controls. How do you factor that into your ROI? That’s priceless. Intangibles associated with ROI are equally as important to factor in as part of the overall ROI analysis.

Another example of an intangible ROI factor is the competitive gain achieved by automating. You can capture more business and reinforce the strength of your brand with automation. You become a trusted source for the borrower. All it takes is one class action lawsuit to ruin your brand. Everyone’s fear is to be on the front page of the Wall Street Journal being called predatory. That’s what CEOs lose sleep over night after night.

So, where are lenders in understanding the value of both tangible and intangible ROI? There is certainly more awareness. However, it is harder to articulate the intangible ROI to a board or to investors when trying to justify the technology buy and convince them that part of the ROI is based on potential fallout. But think about it, there is a lot of cost associated with a loan that is not saleable. The future cost of non-compliance has to be a part of the technology buying process, it just does. Too often it’s not in the final analysis in front of the deciding committee. People are talking about it but we’re not seeing it in many RFPs or RFIs.

Lenders need to ask themselves: What future risk is offset by this potential technology purchase? Those facts are out there and they are real but they are not used to make technology decisions. What the mortgage industry needs is to understand the value of technology to drive measurable change.

About The Author