Automating Loan Workflows With Perfected Data

Capsilon, a provider of digital mortgage solutions, has partnered with Blue Sage, a browser-based, end-to-end mortgage platform, to automate key steps in the loan origination process. 

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As a result of the partnership, Capsilon’s patented document recognition and data extraction technologies have been integrated into the Blue Sage Digital Lending Platform to help mortgage lenders of all sizes drive down origination costs and improve customer satisfaction. The integration with Capsilon is made possible through Blue Sage’s unique application programming interfaces, or APIs, which make interoperability between third-party technology providers completely seamless.

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Capsilon IQ captures and perfects mortgage data from any source, eliminating manual data entry and comparison, and enabling automation with complete, accurate information. The Capsilon IQ platform helps lenders to speed up loan intake and reduce the manual work typically associated with handling inbound documents and data, so they can redeploy staff on more valuable tasks. 

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“We are very excited to partner with Blue Sage, as it represents the cutting edge of today’s mortgage origination technology,” said Sanjeev Malaney, CEO of Capsilon. “Blue Sage and Capsilon also share a common goal—to help drive down origination costs  while helping our mutual customers take on more volume, scale appropriately and create key competitive advantages that drive their business growth.” 

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The Blue Sage Digital Lending Platform is a browser-based, highly scalable solution capable of supporting any mortgage channel, including retail, wholesale and correspondent lines of business. Built, managed and delivered through a cloud environment, Blue Sage can be accessed on any device and handles pricing, underwriting and loan decision-making from the point-of-sale stage all the way to the closing and funding of a loan.  “Capsilon IQ perfectly and seamlessly complements our robust workflow tools and enhances our ability to deliver a truly unique, digital mortgage experience,” said Joe Langner, CEO of Blue Sage. “Not only will Capsilon’s technologies help save our lending clients time and money, they will improve quality and efficiency at every stage of the mortgage lifecycle. We couldn’t be happier to be working together.”

LOS Eyes Workflow And User Experience Updates

Wipro Gallagher Solutions (WGS), a Wipro Limited company, has released the latest version of its Loan Origination System (LOS), NetOxygen v5.1. “We are constantly updating our system to keep pace with the evolving industry landscape, while adding innovative efficiencies to enhance lenders’ speed, productivity and accuracy throughout the entire lending process,” said Scott Dunn, Head of Product Management and Compliance, Wipro Gallagher Solutions. NetOxygen v5.1 takes this agenda forward through many features that have been introduced in the LOS, that include:

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>>NetOxygen v5.1 provides a loan overview feature to offer users a bird’s eye view of various attributes of a loan in the form of a dashboard. It also provides users the ability to look at various conditions associated with the loan and indicates the category of a condition, when a condition is due and the status of the condition.

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>>As part of WGS’ continued focus to expand its list of service providers, it has added several interfaces to fully integrate with Fannie Mae’s Day One Certainty and help lenders process loans in a more automated and streamlined fashion, while enabling a quicker time to close.

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>>NetOxygen v5.1 offers several new self-service tools to enable lenders to perform certain configuration tasks by themselves, thereby boosting operational efficiency and reducing time to market. These features include product and pricing setup, conditions configuration, configurable fee matrices and a user management tool.

>>This version features a well-defined API that allows more seamless integration of third-party applications and several technology updates designed to enhance performance of operations and the user experience.

>>In addition to the system’s numerous workflow feature updates, the 5.1 version integrates a combined correspondent and wholesale portal to offer a more simplified experience pertaining to the processing of loans that originate from the correspondent and wholesale channels.

>>NetOxygen v5.1 Platform also supports the WGS SaaS offering which provides regional and mid- market lenders lower cost of entry, scalability and reduced time to market. NetOxygen’s SaaS offering will keep lenders up-to-date with upgrades and security patches while ensuring best-in-class system uptime.  It offers a pay-as-you-go variable cost model to help lenders reap the benefits of the platform without significant upfront investments. Clients on the SaaS offering will be able to take advantage of the all the powerful features of NetOxygen including multichannel support, self-service tools, and expanding partner ecosystem.

>>Finally, NetOxygen v5.1 fully complies with the latest industry regulatory changes. The expanded set of reportable fields as set out in HMDA 2018 is fully supported, and the new version incorporates changes to the format and number of fields within the HMDA Loan Application Register (LAR). This updated version is also fully compliant with the Uniform Closing Dataset (UCD) mandate, providing a common dataset for loan deliveries to Fannie Mae and Freddie Mac as part of the Consumer Financial Protection Bureau’s Closing Disclosure. Other compliance changes include Military Lending Act updates, Desktop Underwriter version 10.1 updates, a revised Cash Flow Analysis worksheet (Form 1084) and Single Housing Guaranteed Income Limits table updates.

“Our innovations are designed to not only meet the regulatory and workflow demands of our valued customers, but also give them a competitive edge to fuel future growth,” said Alok Bansal, Vice President and Business Head of Wipro Gallagher Solutions. “We are very excited about our SaaS offering that will substantially improve lenders’ efficiencies and help them drive digital transformation with the NetOxygen platform,” he added.

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Tried And True Solutions

According to the MBA lenders saw a net gain of $224 on each loan they originated in the first quarter of this year – down from $575 in the fourth quarter of last year. The drop was due mainly to higher per-loan production expenses. These expenses – which include commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to a study high of $8,887 per loan in the first quarter, which is up from $7,562 in the fourth quarter. So, how do lenders streamline their origination process so it’s faster and less costly without giving up quality? Wayland Pond and Kelli Himebaugh of VirPack have some ideas. Here’s how they see the current mortgage market:

Q: Describe how you first got involved in the mortgage industry.

WAYLAND POND: My best friend from high school recruited me to VirPack when it was a startup. I remember interviewing with Michael Coar, VirPack’s founder and CEO, and I was struck by his passion for mortgage technology and his mission for VirPack to provide the mortgage industry with a platform for the paperless management of loan documents from origination through post closing, including fully indexed electronic loan delivery to investors and business partners. 17 years later, and I’m proud to say we have achieved that mission and our passion is stronger than ever.

KELLI HIMEBAUGH: Similar to Wayland, in 2003 I was recruited to a sales role in the mortgage industry by a personal friend that worked for a midwestern bank with a national home equity lending program. In 2007 when the market and economy started to collapse, I was fortunate to meet the owner of a small LOS technology company that was hiring for their first sales role. In 2008, I transitioned to a different LOS company that I represented in different roles until 2016 when I joined VirPack. I met Wayland and the VirPack management team in 2010 while exploring a vendor partnership, and I was extremely impressed with VirPack’s technology and the positive impact that electronic document management would make in our industry. When the offer came last year, I didn’t hesitate to accept the opportunity to join the VirPack team.

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Q: How has the industry changed since you first entered the space?

WAYLAND POND: There have been numerous changes over the last 17 years, but technology innovation and adoption are at the top of the list. When VirPack was founded, the Internet was a shadow of what it is today. VirPack’s first product was a desktop application that scanned loan documents, automatically indexed the documents (via barcode recognition) and stored the indexed loan files in our imaging system. A short time later, we pioneered electronic loan delivery with the release of the first version of our delivery application that provided lenders with the means to exchange data, documents and images with their investors and business partners. Fast forward to today, and the industry thrives on web-based, software-as-a-service (SaaS) applications such as VirPack’s Document Management and Delivery System (DMDS).

KELLI HIMEBAUGH: In the last 3-5 years the bar has been raised for technology automation expectations, a primary example is integrations. Today, lenders have higher expectations for integrations that both reduce human interaction and are triggered by a status or milestone change in the loan process. VirPack has responded to these higher expectations with integrations like our partnership with DocuSign. VirPack’s Document Management and Delivery System (DMDS) automatically imports and indexes eSigned documents into the borrower’s loan file as soon as the eSignature experience is completed, eliminating the process of manually importing these signed digital documents and filing them.

Q: What can you say hasn’t changed during the years that VirPack has been in the space?

WAYLAND POND: Despite technology innovation, the industry continues to struggle with reducing the cost to originate and service loans, and eliminating the manual processes associated with collecting, indexing and managing loan documents. The number of pages in the average loan file has soared in recent years. According to VirPack’s Mortgage Origination Loan File Statistics Report, more than half of all residential loan files now exceed 500 pages and 43% of all conventional loan files contain between 600 and 900 pages. Lenders need to deploy technology that will reduce costs and improve operational efficiency.

KELLI HIMEBAUGH: To provide an example regarding the struggle to contain and reduce origination costs, VirPack recently partnered with an independent mortgage banker that had been utilizing a different imaging solution for more than 9 years. The owner of the company shared in the very first sales call that the next stages in the successful growth of their business were dependent on a new solution to gain efficiency to deal with increasing loan file sizes, along with the need to automate the document workflow and improve the borrower experience. This requirement was key in their strategy to grow volume and profitability by mitigating costs, primarily the need to not hire more operational staff. VirPack’s DMDS definitely checked all of the boxes for their paperless needs, and our workflow and tasking functionality provided the answer for their cost containment requirements. Our rule-based workflow features provided the automation requirements they had been looking for.

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Q: What has VirPack learned from talking to lenders in the last year?

WAYLAND POND: Two things are consistent with our lender conversations over the last year. First, production costs continue to rise and lenders are not achieving the operational efficiency gains and ROI expected from the document management tool provided by their LOS. More often than not, it is private-labeled or bolted-on and the lender’s requirements and expectations are not being met. Second, many lenders prefer to leverage software solutions from vendor partners that are subject-matter experts and have a mission and culture that aligns with theirs. They recognize that through these partnerships they can close the gaps in their mortgage operations and workflow and avoid the disruption that comes with converting to a new costly, enterprise LOS.

KELLI HIMEBAUGH: Also, there’s no denying the digital mortgage race and its appeal to the millennial generation and tech-savvy consumers, but we’ve learned it’s not an all-or-nothing/one size fits all approach. Not all lenders are ready to fully embrace the digital mortgage and sacrifice the relationship-driven mortgage origination experience that is tried and true. Lenders are confident they can find a balance between the traditional approach and utilizing technology that will provide innovative communications in real time, workflow automation and improve collaboration between borrowers, production, and operations teams.

WAYLAND POND: VirPack’s journey with mortgage lenders over the last two decades supports this balance with the latest features in document management and workflow solutions, along with our portals designed for borrowers and third party originators that provide the real time data and document updates to improve the borrower/lender experience.

Q: Can you tell us more about the Rapid Deployment program that VirPack launched in 2017?

WAYLAND POND: Traditional document management technology implementations are often costly and time consuming, and I’m pleased to share that our rapid deployment program has streamlined DMDS implementations and our customers are up and running within weeks. We’ve accomplished this by harnessing best practices from lender deployments across the country and eliminating duplicate and labor intensive activities. By leveraging 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.

KELLI HIMEBAUGH: And, because lenders are not starting with a blank canvas, they can readily turn their focus to leveraging additional capabilities and advanced functionality 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.

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Q: What are the required capabilities that a lender should put on its document management technology evaluation?

WAYLAND POND: Lenders should pass on a technology provider that does not have a) document management capabilities that include OCR to automate the identification and indexing of documents, and b) integrated one-click delivery of loan files and data electronically to investors, HUD for FHA insuring, servicers, subservicers, QC firms and MI companies. For maximum functionality and efficiency, a vendor’s document management offering needs to have strong integration features, such as gateways to external data sources and web service APIs to exchange documents and data. These capabilities are essential to enable document management to be an integral part of a broader, cohesive loan processing and management solution.

KELLI HIMEBAUGH: Enterprise solutions like the LOS provide high value if their ancillary solution components are enterprise compatible and tightly integrated. LOS providers today are not focused on document management enhancements, but instead are focused to develop and implement all the regulatory changes required in their technology to mitigate risk for lenders, and rightfully so.  And, if their offering is a series of bolt-on technologies that are subject to secondary, delayed support services and are not designed to adapt to atypical scenarios, then lenders can lose thousands of dollars each year in what is perceived to be an included or “free” feature of their enterprise platform. Lenders have to consider technology like VirPack that solely focuses on its core competency and what it does best — developing and delivering innovative, feature-rich document management and delivery solutions that incorporate best practices and years of experience.

Insider Profile

Wayland Pond is senior vice president of sales and marketing at VirPack, where he has spent his entire 17 year mortgage technology career promoting the benefits of document management and delivery technology and collaborating with lenders, investors and technology providers to improve operational efficiency. Wayland was instrumental in pioneering the mortgage industry’s first electronic delivery of a loan package that included data, documents and images. In his role at VirPack, a leading provider of document management, imaging and delivery technology to the mortgage banking and financial services industry, he oversees the sales and marketing team and partners closely with the product management team to ensure customer and lender feedback is incorporated into the company’s technology solutions. Wayland also serves on the Board of Directors at VirPack.

Industry Predictions

Wayland Pond thinks:

1.) Lenders will continue to be cautious about compliance therefore page counts in files will continue to increase.

2.) More LOS and other industry technology providers will offer APIs to support their clients’ desire to integrate with best-of-breed technology providers.

3.) More investors are going to require electronic loan delivery and will not provide best pricing if delivered another way.

Insider Profile

Kelli Himebaugh is the National Account Executive with VirPack, a leading provider of document management and delivery technology to the mortgage banking and financial services industries based in McLean, VA.  Kelli is a proven sales leader who brings more than 20 years of housing finance experience and 10 years of experience in mortgage technology to VirPack. Prior to joining VirPack in 2016, she served as vice president of customer experience with Altisource Origination Solutions. In this role, she was responsible for managing client relations and operations support across four business units. Prior to her work at Altisource, Ms. Himebaugh spent 8 years with Mortgage Builder, a loan origination solutions provider, where she served as corporate vice president overseeing business operations, client services and sales.  She is also a member of the Executive Team at PROGRESS in Lending Association and was named in “the 50 Elite Women in Mortgage” by Mortgage Professional America magazine.

Industry Predictions

Kelli Himebaugh thinks:

1.) Home affordability and mortgage qualification will worsen due to rate increases and slow income growth.

2.) More non-bank owned investors will enter the secondary mortgage lending market.

3.) Rental home rates will continue to rise faster than incomes due to lack of inventory.

Technology That Serves A Purpose

It’s always great to see technology in action doing good for the industry. For example, Crown Title, a full-service real estate title company that provides title, settlement and escrow services for residential and commercial real estate clients nationwide, has selected IndiSoft’s RxOffice Title module to manage its title ordering operations. RxOffice Title automates title task workflow management and allows data import from other systems. Here’s why they made this decision:

“This latest module on the RxOffice platform allows Crown Title to further improve its workflow process and hold efficiency in high regard,” said Sanjeev Dahiwadkar, CEO and president of IndiSoft, a technology development firm that specializes in systems for the financial services industry. “RxOffice Title module allows companies such as Crown Title to enhance internal processes and better serve their customers. The module is unique in the sense that it has the ability to import and export data from other systems and export invoices in QuickBooks.

In addition to automating title workflow management, RxOffice Title enables email invoices and uploads title reports. RxOffice Title also creates PDFs and merging document packages.

By using the RxOffice Title, Crown Title is able to customize workflow management, ultimately increasing productivity and effectiveness of processes. The module also features a customizable dashboard.

“We wanted a system that would allow us to automatically generate and capture title reports in quick manner while improving our day-to-day process,” said David Thurston, president of Crown Title. “The customizable workflow element allows us to tailor the system around our processes. We aim to provide our customers with exemplary title services, and RxOffice Title helps us achieve that goal.”

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Partnership Looks to Help Lenders Automate Strategically

Global professional services firm Alvarez & Marsal (A&M) has formed a strategic alliance between the firm’s Real Estate Advisory Services practice and METIS Financial Network, offering clients the benefit of A&M’s extensive real estate valuation, operational and consulting industry expertise, and proprietary tools, alongside METIS’ highly adaptable, scalable data, document and workflow solutions. Here’s how everything comes together:

The alliance enhances the best-in-class, value-added services and technologies available to financial institutions, private equity firms, and other sophisticated investors who look to A&M and METIS for real estate transaction support and valuation management.

Floyd W. Kephart, Chairman of METIS, stated “the breadth and depth of A&M’s real estate consulting practice, together with our unique customizable technology, provides a paradigm shift in how real estate information is transformed into actionable, value-enhancing strategies.”

METIS provides platform technology that automates key elements of a client’s process to enhance productivity, improve transparency and streamline communication between all stakeholders in the process. “We differentiate ourselves by listening to our client and understanding their workflow, strategies and business goals in order to develop and implement a tailored solution that addresses their unique needs. Our technology not only converts “big data” to user-focused data quickly, but produces key analytics and market information critical for effective management and decision making”, said Joy Hou CEO of METIS.

Privately-held since 1983, A&M is a global professional services firm that delivers performance improvement, turnaround management and business advisory services to organizations seeking to transform operations, catapult growth and accelerate results through decisive action. METIS provides custom-tailored platform technology for the management of data, documents and workflow, and has extensive experience in delivering solutions to the real estate industry, with a focus on financial institutions, equity funds and investors.

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Credit Union Sees Big Growth

Richland, Wash.-based HAPO Community Credit Union (HAPO), with 1.2 billion in assets and over 109,000 members, has increased its loan origination and processing with the Velocity loan origination solution from Fiserv. This tool supports consumer, business, home equity and indirect loans all on the same platform, and integrates all of the essential system components required for lending success, including loan origination, decision support tools, workflow software and image capture capabilities.

An enhanced version of Velocity, Velocity 3.0, is currently in beta testing and will include improved system administration capabilities and improved data mapping of forms and standardized interfaces. “HAPO has built a reputation for making good loans to good people and the Velocity platform has given us greater control in offering a smooth, efficient lending process to our members,” said Scott Mitchell, Chief Lending Officer at HAPO. “We use the system to support multiple loan types, such as boats, RVs, secured lines of credit and dealer direct auto financing.

“The customizable workflow tools allow our staff to tailor the processes that work best for our organization. We’re also looking forward to deploying Velocity 3.0, which will provide the foundation for additional self-service options in our lending operation,” he concluded.

“Credit union employees often have to wear many hats, and HAPO is committed to delivering exemplary service to its members across each of those experiences. With Velocity, HAPO has been able to provide superior member convenience by eliminating manual steps throughout the origination process using just one system to support a wide range of loan types,” said Kevin Collins, president, Lending Solutions, Fiserv. “Velocity has the capabilities credit unions such as HAPO need as they adjust to the current loan origination landscape.”

Velocity is a pre-configured solution with features designed for small and mid-tier credit unions and community banks seeking to grow their business. Velocity simplifies and expedites loan closing and provides greater control over business operations by integrating with numerous account processing systems and an extensive array of third-party applications.

Unlocking The Value Of Documents And Data

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TME-Alec-CheungEver since the ESIGN Commerce Act of 2000, the mortgage industry has gradually adopted electronic signatures as a way to improve the efficiency of the mortgage transaction and to speed up the pace of commerce. No more waiting for mortgage documents to be sent via courier for paper signature. No more faxing of signed documents while originals followed in the mail. With the growing acceptance of electronic delivery and signature of documents, workflow has become more efficient, more secure and easier to monitor for status.

The mortgage industry has not yet completed its journey though. We still have not transitioned to a completely electronic workflow and the vision of a totally electronic mortgage has not been realized. There have been many real external barriers to progress. Not until last year did the IRS officially accept electronically signed documents for the request of tax transcripts; and as of this writing, the FHA has STILL not issued their formal guidance on the acceptance of electronically signed documents, though that is expected very soon.

Other impediments that are more industry-related remain as well. There is the matter of needing paper printouts for many county recordings and for investors. Because state laws vary so widely, legal experts will still often advise that it is safer to have the actual mortgage note in hard copy rather than in an electronically signed format. These obstacles will eventually fall as technology continues to improve, as early adopter banks prove that electronic formats are viable, and perhaps most importantly, as the Consumer Financial Protection Bureau takes up the mantle in 2014 of championing the eMortgage and forcing the necessary changes to make that a reality.

But there is also an additional hindrance, a more subtle one that if not recognized may in the end prove to be the most persistent because it is not caused by a lack of technology or an external constraint, but by the very way the mortgage industry has incrementally adopted electronic fulfillment. This hindrance has to do with the way banks deploy electronic delivery and signature as a series of add-on projects rather than as a holistic system that ties together the entire mortgage process.

Why does this matter? Because the mortgage workflow is a complex, multi-step process that involves many participants, is very document centric, and heavily reliant on the data within those documents to ensure quality, compliance and a positive customer experience.

When the delivery of documents and the exchange of crucial data within those documents is implemented merely as a feature to be added to process support systems, it results in a fragmented approach that is constrained by the very activities it was meant to support. There is in fact a sizable missed opportunity to leverage documents and data across the mortgage lifecycle from one participant to the next in order to better monitor compliance, to mitigate fraud, to enhance quality and to deliver a truly superior customer experience.

Siloed Approach to Delivery

To understand why this has happened, you have to look at how we arrived at our current state.  The adoption of electronic delivery and signature in mortgage has frequently been driven by a series of loosely related but nonetheless individual triggers.

The first of these is compliance. Banks often end up adopting electronic delivery and signature only when triggered by new regulations. Appraisal deliveries are a good example of this. When the CFPB stated that lenders would have to provide borrowers with copies of appraisals for all mortgages and not just higher-priced ones, it forced banks to prioritize the electronic delivery of appraisals as a high priority initiative in order to be able to meet the 3-day delivery time period mandated by regulation.

Overcoming legacy processes and a “the way it’s always been done” mentality is a second factor. Just because something is legal doesn’t always mean that businesses will change their processes right away. When they do change, it often comes one step at a time. It took the IRS till just last year to finally begin accepting electronically signed tax transcript request forms. This was just ONE form and though glad for the progress, it’s yet another example of how the migration to electronic delivery and signature has unfolded in a piecemeal fashion.

A third contributing factor is that there are multiple actors involved in transacting a mortgage, and each has its own systems. Lenders rely on loan origination systems. Title agents have their settlement software. Underwriters utilize title systems. Appraisers have appraisal systems and appraisal valuation models. Even income verification vendors for the IRS have their own proprietary systems. These are separate parties, with their own systems, their own buying behaviors and, therefore, they look at the adoption of electronic delivery and signature in their own way.

The last contributing factor is industry standards. This has more to do with data that documents, but it is equally important. It has taken many years for MISMO to achieve a broad level of acceptance as the de facto standard for exchanging mortgage data. Prior to MISMO, two parties that needed to pass data back and forth had to agree on a data exchange format themselves. It was much simpler to do so for very specifically defined data sets in relation to certain documents. With MISMO’s latest v3.1 standard, we now have a commonly accepted standard that will simplify and normalize data exchange for the benefit of all.

Put together, these various factors have resulted in electronic delivery and signature as a technology added onto to (or perhaps integrated into) existing systems. This assessment is not meant as a criticism. If anything, our industry deserves credit for recognizing problems and them methodically tackling them. We have been pragmatic about our approach if nothing else. It just so happens that as we look back, we can see that the end result is a mortgage process that is rather stitched together in terms of workflow and data exchange between multiple participants.

Single Delivery Platform

This uneven approach where electronic delivery is tied to individual systems means we have no opportunity to leverage delivery as an underlying process that can bring the entire mortgage lifecycle together in a more efficient and effective way. After all, the delivery of documents and the exchange of data within those documents is the one process that touches every participant in the mortgage lifecycle. That simple but fundamental insight bears repeating. From application to processing to underwriting to closing to post-close, documents and data are central to every step along the way. They are used to demonstrate compliance. They are analyzed to uncover risk. They are carefully designed to ensure an effective customer experience.

As a mortgage progresses through each phase, the value of the data that accompanies documents grows. During the application and processing phase, the lender sends the initial disclosure so the borrower can review and understand the loan she has applied for – how much she will pay in interest, her rights as a borrower, etc.

At closing, the lender sends the final approved loan package to the settlement agent. A common delivery platform is in the optimal position to compare the data from initial disclosures to final approved loan to corroborate that the loan the customer is getting matches the loan initially applied for and quoted to the borrower. This is an example of how documents and data from one loan phase can be valuable in the next loan phase.

Likewise, after close, the settlement agent can send a copy of the signed loan for delivery back to the lender. Again, with a common delivery platform for document and data exchange, the signed loan can be immediately compared to the approved loan to ensure discrepancies are within quality and regulatory tolerance. The automation and simplification of these checks – QM, RESPA, anti-predatory lending, etc. – can considerably speed up the time it takes for a lender to complete its processing. Faster processing means faster time to loan sale to investors, which directly and positively impacts bank revenue.

* * * * *

It is easy to think of the electronic delivery and signature of documents as an efficiency driver. E-signature vendors are partly to blame for this. It is much simpler to tout the advantages of e-signature independent of the kind of document or workflow you are supporting. Faster transactions. Better audit trails. Simple to use. These are all benefits that vendors typically advertise.

But the actual workflow process being supported is fundamentally important to the value proposition of electronic document delivery and signature. For complex, multi-step processes like mortgage lending that involve many participants, document delivery is the common component that ties many of the activities together.

Furthermore, the data that is accessed via document delivery can help a lender demonstrate compliance, better manage risk and deliver a superior customer experience. Full access to documents and document-related data puts lenders in a position to be able to substantiate that the loan the borrower applied for is consistent with the loan that was approved, with the loan that was actually signed at the closing table, and with the loan that was ultimately sold to investors.

You can achieve this by building numerous custom connections and integrations with the various systems that support the mortgage process, or you can choose a single delivery platform that already has the connectivity in place. One way or another, this will be needed, and it is something that lenders should begin to think about.

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Let’s Learn From The Auto Industry

The best people are always open to new ideas. They’re always learning. So, I like to bring in topics on other industries that I think you might learn a bit from. In this case, I learned that the auto industry is doing some interesting things that the mortgage industry might try.

I was told that Fiserv’s Automotive Loan Origination System (LOS) was used by dealers and lenders to process more than 13.6 million credit applications in 2013, an increase of 16.5 percent over the previous year. More than 4.6 million contracts were funded on Auto LOS – a 14.3 percent increase over 2012 — of which nearly 900,000 were electronic contracts (e-contracts). 2013 was the first full year that e-contracting capabilities were integrated into the company’s end-to-end solution for automotive loan origination.

This substantial volume of credit applications and funded contracts reflects the slow return to health of the U.S. automotive industry, which registered robust growth in sales and financing for both new and used cars and trucks. The growing adoption of e-contracting mirrors the automotive industry’s transition to new technology and digital lending. E-contracting systems enable auto dealers to submit an electronically signed contract to a lender, greatly reducing the time needed to approve and fund loans, minimizing errors and leading to improved customer satisfaction. Are you listening Mr. Mortgage Lender?

“Increasing automobile sales and the recovering economy contributed to the impressive growth of credit applications and contracts supported by our Automotive Loan Origination System,” said Kevin Collins, president, Lending Solutions, Fiserv. “Captives and their dealers realized the role that technology can play in reducing costs, improving customer satisfaction and facilitating faster decision-making. This led to the impressive volume gains and growing adoption of e-contracting processes.”

By using e-contracting through Automotive LOS from Fiserv, auto dealers have been able to realize same-day or next-day funding and approval of contracts, a significant improvement over the laborious and slow paper-based contract process.

Fiserv technology gives lenders access to tools that help them better understand their borrowers’ financial situation, and offers a holistic view of their entire lending portfolios so they can make smarter lending decisions and close more deals. The efficient and error-free execution of e-contracts helps lenders reduce costs by eliminating paper, deliver high-quality service and remain competitive in today’s auto finance market.

Fiserv’s Automotive Loan Origination System is a solution for automotive loan origination, from electronic application capture through credit processing, funding verification, validation and booking of new loans and leases. The system assures a fast and efficient origination process, enforces compliance, mitigates risk and promotes profitable growth by lowering processing costs without sacrificing quality for quantity.

Mortgage lenders just might learn a thing or two from what these auto lenders are doing in my humble opinion.

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New Paperless Trends Emerge

*New Paperless Trends Emerge*
**Data Shows Advances**

files***In its ninth Path to Paperless study Xerox Mortgage Services found that even with compliance demands front and center, 63% of respondents noted having electronic document solutions in place, compared with 55% in 2012, which underscores the commitment to adopting paperless technologies in the near term. Here’s what else they discovered:

****The survey showed other positive trends in the acceptance and implementation of electronic initiatives, including:

****>> 78% of respondents’ companies are implementing technology to handle the flux of the industry.

****>> 45% feel their LOS’s imaging capabilities are lacking – they either use the capabilities but do not consider them sufficient or do not use them due to considering them insufficient.

****>> 76% of respondents prefer solutions that accommodate paper-sourced, imaged and electronic documents, and 75% value solutions that work seamlessly throughout the entire loan lifecycle.

****>> 80% of respondents cited decreased turnaround and processing time per loan, and 78% cited decreased processing costs per loan as benefits of going paperless.

****You can request a copy of the Path to Paperless Survey HERE to see how your paperless technology initiatives compare to your peers. The survey results represent a cross section of industry executives and functions ranging from origination, underwriting, closing and more.