Discussing True Innovation

The PROGRESS in Lending Innovations Award Winners gathered to talk about the future of mortgage lending. Over 100 mortgage executives came together to attend PROGRESS in Lending Association’s Ninth Annual Innovations Awards Event. We named the top innovations of the past twelve months. After that event, we wondered what would happen if we brought together executives from the winning companies to talk about mortgage technology innovation. Where do they see the state of industry innovation right now? And what innovation is it going to take to get our industry really going strong? To get these and other questions answered, we got the winning group together. In the end, here’s what they said:

Q: Some say innovation has to be sweeping change. Others say innovation can be incremental change. How would you define innovation?

JERI YOSHIDA:Innovation is filling an unmet need with a solution that people prefer over their previous options. I don’t think that sweeping versus incremental change is a major factor in determining innovation.

STEVE VIARENGO:We define innovation as the transformation of the way a company or a process works. Disruptive, sweeping change is exciting, but unless you’re a start up, it’s rarely practical. Most companies need to protect their core business while driving change, so incremental change is necessary for success. At Capsilon, we provide disruptive technology that fundamentally changes how companies work. Over the years, we’ve learned how to implement innovative new processes in incremental ways that help companies realize an immediate, positive business impact while marching toward broader, more sweeping changes that add up over time.

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SARA NAKAE:You can’t put innovation in a box or on a timeline, innovation happens through thought, focus, and excellence. Innovation can be either sweeping or incremental, it’s not an all or nothing process. In fact, the definition of innovation does not contemplate “how” a new product or service is introduced, innovation is taking a great idea and turning it into a valued product or service that customers will buy. From a business standpoint, incremental innovation is the more popular approach because it comes with less financial risk to the organization. But sweeping, or radical, innovation is something that shouldn’t be ignored either. Both exist and both have their merits. But the key to innovation is to focus on the impact to the customer, did you improve their user experience? Innovation can happen incrementally or sweeping, as long as the product or service creates value from the customer’s perspective.

MATT HANSEN:I like to think of innovation as something that changes the status quo. It can be organizing and making sense of other’s ideas. Innovation can also be something that is more self-created. Either way, I believe innovation requires execution.

SHAIMAA ELK:Innovation comes in all forms and should not be limited to being seen as a sweeping change. Innovation can be defined as simply as the application of ideas to remain relevant.

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BOB BRANDT:To Optimal Blue, innovation is not a tsunami that happens, and everyone then reacts to that moment in time. Innovation is not something you revisit only when you have the time. At Optimal Blue, innovation is a pillar in our corporate DNA. We view innovation as a constant, as something that drives our approach each and every day.

ELIZABETH KARWOWSKI:Save once in a generation discoveries, I don’t think sweeping change is possible without being preceded by smaller, incremental changes. In other words, small changes to procedures or products over a period of months or years often have the effect of completely transforming them into something that’s never been done or seen before. It’s often not until we look back to where we started that we fully grasp the gravity of those seemingly small changes made along the way.

DAVE SIMS:I would define innovation as anything that has the potential to dramatically change a market. In terms of the mortgage industry – an industry where processes have mostly remained unchanged for more than 80 years – the introduction of digital automation and point-of-sale solutions have caused massive disruptions by simplifying the once-complex and non-secure process of originating a mortgage loan, thus setting a new standard in borrower expectations. Floify was one of the first of its kind to market in 2013. Since then, we have seen our user base grow to nearly 700,000 lenders, borrowers, and other loan stakeholders. Every day, more and more lending operations are transitioning to digital solutions, which is helping them remain competitive in this highly-competitive industry and allowing them to effectively fight margin compression. To me, the recent changes in the mortgage industry have been the epitome of innovation.

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BOB DOUGHERTY:Innovation can be incremental or sweeping, depending on your business objectives and strategy. Both sweeping and incremental innovation promise great benefits—improved accuracy, speed and profits. However, incremental innovation lacks many of the challenges that come with radical change, such as significant disruption of day-to-day business or heavy time and resource investments in new technology that may or may not work.

Q: How would you define the state of innovation in the mortgage industry? Is it thriving or in a state of decay?

SHAIMAA ELK:The state of innovation in the mortgage industry is modest at the moment. If innovation is the application of ideas to remain relevant than a key element in the equation is the degree of underlying change in regulations, processes and expectations that drive that relevance equation. The mortgage industry is currently heavily regulated, which impacts its speed of change. In this current environment, industry change is still slow and limited, which has put a reduced demand on the need for innovation.

MATT HANSEN:Organization of ideas is happening in the mortgage space. There’s rarely a new idea, but execution of ideas is getting a lot more attention. Some companies are able to execute, and some are not. We’re also seeing vendors open the doors between each other, which previously didn’t happen on the same scale. This is bringing new products to the market. For this reason, I would say we are in a state of growth and innovation.

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STEVE VIARENGO:It is an exciting time to be in the mortgage industry. There has been a significant influx of capital invested in technologies that enable a better way of doing business, legacy technology companies are recognizing the need to create more open environments and work with other tech providers, and companies in the space are embracing change. We’ve been working closely in partnership with our lender, investor, and servicing partners to build innovative solutions that solve the biggest pain points for companies in the space.

BOB BRANDT:We are in the midst of an innovation renaissance period in the mortgage industry. There are more technology vendors developing more interesting approaches to automation and problem-solving than ever before. Optimal Blue believes that the state of innovation is thriving! However, the challenge that industry innovators face is to think beyond technology silos. For this very reason, Optimal Blue has developed robust and highly unique RESTful API interfaces that +50 leading mortgage vendor partners leverage to break down the integration barriers between mortgage technology systems that have historically held back the industry.

SARA NAKAE:With today’s economy and the advances in technology and data availability, innovation in the mortgage industry is moving from stagnant to thriving. There’s been a lot new capital infusion through various FinTech companies over the past 24 months. Financial institutions are becoming more competitive every day, each one trying to produce a better product and borrowing experience. Reducing costs and turn-time are big factors for lenders who want to compete, and they are putting their focus on innovative ways to improve their product and their process.

BOB DOUGHERTY:Innovation is thriving in the mortgage industry. Technology providers are constantly launching new solutions; enhancing their existing products; and integrating with other technology providers to streamline and accelerate the mortgage origination process for everyone involved. From a broker perspective, all of this technology is empowering because it lets them focus more on their borrowers and less on manual processes or maintaining software or hardware.

DAVE SIMS:I believe the state of innovation in the current mortgage industry is neither thriving nor in a state of decay; rather, it is now in a mode of stabilization. When Floify’s automation technology was introduced to lenders in 2013, there were only a few players in the space, all vying for a piece of the mortgage tech market. Since then, dozens of hopeful competitors have come and gone. Only a few have withstood the test of time. What has set Floify apart from our competition is our ability to continue our pace of innovation and partnering with like-minded leaders in complementary spaces, including VOE/VOA/VOI, credit reporting, eSignature, and productivity vendors. This strategy has allowed us to develop a single solution that integrates with our customers’ favorite solutions, further simplifying their lending operations.

JERI YOSHIDA:I wouldn’t call innovation in our space thriving, but the work I do with NEXT has shown me that there are a lot of new technologies entering the mortgage industry. How many of them are truly innovative? That’s the question. A lot of companies want to be the one that takes the mortgage industry out of its old school, manual, paper-based processes. And a lot of them are working really hard to stake that claim by conceptualizing new technologies and bringing them to market. That in itself refutes the notion that our industry is in a state of decay.

ELIZABETH KARWOWSKI:The mortgage industry is fiercely competitive, and competition almost always breeds innovation. There is no better teacher than past experience and, as mortgage professionals learn from past missteps and accomplishments, we are seeing new ways in which technology is leveraged to increase efficiency and streamline processes. In this industry it is almost impossible to be successful without constantly tweaking and tinkering to get an edge on the competition.

Q: Lastly, if there was one innovation that you would say the mortgage industry desperately needs to happen over the next twelve months, what would it be?

SARA NAKAE:Focus on their customer, how can lenders create a better experience for their borrower? It’s a combination of cost and time. Lenders need to focus on reducing the cost for customer’s to get a loan and the time it takes to close. Innovation that focuses on those deliverables will be winning over the next 12 months.

SHAIMAA ELK:The industry could use a fresh approach to mortgages, a re-imagining of the entire process. This would require a joint effort with lenders, investors, regulators and vendors. But in the meantime, the more pressing issue is not what type of innovation the industry needs, but how quickly can we adopt the innovation that is readily available today, like digital portals, robotic process automation (RPA), data analytics, and blockchain. Furthermore, beyond adoption, there’s the notion of packaged solutions that deliver integrated solutions from “best-of-breed” providers. This is a different perspective on innovation that could prove to be equally as fruitful.

BOB BRANDT:As an industry, we are beyond the desperate need for “the ONE innovation” that we hope will make the key difference. We believe that the industry is at a point where the most significant difference will be made by a series of incremental innovations by a host of companies. Optimal Blue has already automated the secondary marketing process, and now our focus has turned toward a series of even more granular functionalities and automation that will pave the road for an entirely new way of conducting originations in the industry. A good example of that is our “lights-out” lock desk and trading platform automations.

BOB DOUGHERTY:Since origination volume is expected to remain flat this year, more brokers and lenders are turning to non-agency/non-QM products to reach underserved borrowers. Originating these loans is typically a manual process. In order for the non-agency/non-QM market to scale, the mortgage industry needs technology that allows originators to quickly and confidently qualify these borrowers.

STEVE VIARENGO:The absence of good data is one of the most significant barriers to innovation in the mortgage industry. Having clean, accurate information you can trust is a critical element needed for automation, risk reduction, and cost reduction. Companies can now solve this problem with technology like Capsilon¹s doc and data audit tools that enable them to build a complete, accurate record for every loan. Companies who don¹t adopt these types of technologies over the next twelve months are going to find it hard to take advantage of a wave of innovative technologies coming that require clean data to be effective. The massive impact these technologies will have on the mortgage industry is now undeniable. Companies who lag will be left behind.

MATT HANSEN:Twelve months is a very short period of time. It seems most likely this idea has already been conceived and mostly built if it’s to come to market in the next 12 months. That being said, the cost of human capital has been difficult for lenders in lean times. In order to solve this, it would need to be an innovation that cuts into the biggest expenses lenders incur on a per loan basis.

ELIZABETH KARWOWSKI:I think it’s time to turn our attention to potential borrowers who don’t fall within traditional lending parameters. Specifically, Millennials and younger generations are entering the work force with priorities and values that often differ greatly from Baby Boomers and Generation X. Many of them have never had a credit card, and don’t have any credit history or credit profile at all. It is imperative that the industry begins implementing  educational programs and providing resources in order to ensure that these young people, (who will eventually make up the majority of the population) see the value in home ownership and will actually qualify for a mortgage.

DAVE SIMS:The mortgage industry would greatly benefit from an innovation that improves the accuracy of real estate appraisals. In fact, more than one in three appraisals contain inconsistencies in property ratings and values. Additionally, conflicting property condition and quality ratings can result from numerous factors, including human error, appraiser subjectivity, physical changes in property condition or quality, or even possible fraud, which has been cited by the GSEs as the top origination fraud scheme trend in recent years. Developing an innovation that would create consistencies across the appraiser network would be the perfect way to combat this troubling trend.

JERI YOSHIDA:The mortgage industry desperately needs innovative change in the way it thinks and interacts as an industry. There is no shortage of sharp minds and great ideas, but in order to fully capitalize on them, the industry needs a shift in its thinking. Day in and day out, I work with more brilliant executives through NEXT than I have at any other time during my decades-long career in this industry. If these particular executives were leveraged in C-suite positions, or if they were given a more visible platform, I suspect we’d see the start of a massive push forward—in innovation, creative ideas, opportunity, and so much more. This would in turn produce other measurable results from higher client and employee satisfaction to higher recruitment of top talent. This could set the tone for not one or two innovations, but rather a culture of innovation that yields a decade or more of brilliant, truly innovative advances in the mortgage industry.

Partnerships In Lending Drive Better Business Outcomes

In today’s fast paced and ever changing mortgage market, vendors are quickly realizing that trying to “go-it-alone” is not always what’s in the best interest of their client.  Vendors need to explore new ways to deliver innovation that specifically addresses the challenges that lenders are facing today and into the future.

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Strategic partnership in lending can improve the customer experience while driving better business outcomes for each partner involved. The right partnership provides major advantages for all involved: mutual customers, each business and the industry as a whole.

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Consumer’s benefit from a seamless and fully integrated offering that truly delivers more tools and functionality in one comprehensive solutions.  The consumer doesn’t have to jump to multiple products and services to obtain their desired outcome.  This provides a frictionless user experience while improving customer satisfaction. 

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Each business partner benefits from the right partnership in a number of ways.  It allows businesses to expand their offering to deliver what their customer is looking for and more specifically needs at this point in time to address changing market condition.  It also allows each partner to leverage their specific strengths while minimizing gaps or others areas that they have less expertise.  

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In addition, businesses can expand their target audience, grow faster than they could organically, and capture additional market share.  Partnerships can also leverage synergies between the two companies, marketing and outreach strengths, sales teams, and brand awareness within the industry.

For example, we recently partnered with Ellie Mae. The integration between Capsilon and Ellie Mae allows mortgage lenders to more efficiently and securely share data between Capsilon’s solutions and Encompass® to drive quality and efficiency at every stage of the mortgage lifecycle.

Mutual Capsilon and Ellie Mae customers benefit from the seamless integration that removes manual work and time delays between the systems, making it even easier for customers to leverage both solutions.

For example, Encompass® customers can now use Capsilon to automate “stare and compare” activities. Companies can immediately access and compare Encompass® data to information within documents, instantly spotting where supporting documents and data don’t match, enabling them to use better data within Encompass & other business applications.

What this means for Ellie Mae customers, and our current mutual customers, is flexibility and options to take advantage of best of breed technologies, in which they can then create a technology stack designed to solve their specific lenders pain points, allow them to create competitive advantages and provide them a platform to proactively respond to the market and their customers. 

This is just one example of how partnership can drive better business outcomes while delivering an improved customer experience. When this happens the entire industry benefits.We are currently working with a number of vendors to develop partnerships and integrate our solutions so that we can continue to add value to lenders.  We are constantly looking for ways to drive better business outcomes.  It stats with an open mind and a willingness to realize that you don’t have to “go-it-alone”. 

About The Author

The Future: Automated With Perfected Data

Capsilon, a leading provider of mortgage automation software, saved an estimated 5.6 million people hours collectively in 2018. Capsilon’s core technology, Capsilon IQ, uses data and AI to automate manual tasks and enable better, faster decision-making. This technology enabled Capsilon customers to realize these significant productivity gains, leading to better bottom line results while allowing them to scale quickly as volume fluctuates.

With lower mortgage originations, mortgage companies faced more competition for each loan, compressing margins and weakening business. A growing number of companies have responded by accelerating the adoption of technology, in particular for loan operations, so they are better positioned to outmaneuver competitors from a process and customer satisfaction standpoint, and make their operations more flexible to respond to market conditions.

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Drawing on their success, (left to right) Capsilon Chief Operating Officer Jim Obsitnik, Senior Vice President, Marketing Ginger Wilcox, and Founder and CEO Sanjeev Malaney discuss their vision for the future of mortgage lending.

Q: Capsilon’s mantra is “The Digital Mortgage, Perfected.” What does that mean?

 SANJEEV MALANEY:Companies are starting to automate but they’re missing a critical step. For automation to be successful, you need accurate, trusted data. That starts with the ability to effectively consume data from ALL sources— POS, LOS, asset and income aggregators, documents, etc. Then the data needs to be normalize and rationalize into useable bits of information, which feed into business applications designed to help lenders, investors and servicers reduce their cost to originate, close, purchase or service loans faster, and improve overall quality and scale as volume fluctuations hit the mortgage market.

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Q: How does Capsilon “perfect” the digital mortgage?

GINGER WILCOX: It starts with Capsilon IQ,whichis the cloud-based Digital Mortgage platform that captures and perfects mortgage data from any source and makes it useable across business applications, creating efficiencies at every stage of the mortgage lifecycle. 

Capsilon IQ captures millions of data points from digital sources and from documents. Our patented Document Recognition & Extraction technology enables companies to reduce the manual labor associated with document ingestion and management. Once documents and 3rdparty data sources have been ingested, Capsilon IQ standardizes the data and makes it accessible in as a single, authoritative record for each loan file. The source of truth for each data point and its associated evidence are always connected with the loan record.

Q: How can lenders, investors and servicers use this “perfected” data?

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JIM OBSITNIK: Companies can use the perfected data in their own systems or take advantage of Capsilon’s Digital Mortgage Solutions that use the perfected data to automate processes and solve the biggest pain points that weigh mortgage companies down.Nearly every step of the mortgage process can be automated.

Q: How does Capsilon help lenders automate their loan process? Can you provide specific examples?

GINGER WILCOX:We offer automation solutions for lenders, investors and services across the lifecycle of the loan. Right now, we’re focused on underwriting as a key area to transform for the origination channel, pre-purchase audits for investors in the correspondent channel, and loan boarding in the servicing channel.

Q: Why is underwriting a key focus?

SANJEEV MALANEY: Underwriting has been heavily impacted by the latest regulatory changes. Over the last decade, companies going from 8-10 new underwrites a day to the 1.2 underwrites a day based on MBA stats. Even just doubling that has a significant impact on a company’s bottom line, and more importantly, customer satisfaction to help retain and recruit top sales people. 

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Q:To solve this pain point, you recently launched a solution for underwriting automation. Capsilon Digital Underwriter, which helps underwriters make rapid, informed loan eligibility decisions with perfected data.  Can you explain how? 

SANJEEV MALANEY: It enables underwriters to calculate income and perform credit, income and collateral assessment using a complete, perfected data set. Capsilon Digital Underwriter runs on the Capsilon IQ platform to capture and perfect mortgage data, ensuring underwriting rules are only applied to complete, validated information. The source of truth for each data point and its associated evidence are connected with the loan record, maintaining a digital chain of evidence for each decision. This enhances the quality, security, and compliance of underwriting decisions.

Real-time listeners monitor and flag new or changed information and evidence to reduce manual checks and given underwriters the confidence that decisions are being made with the right information. The end result is a better borrower experience that gets borrowers to the closing table faster, with a more cost-efficient, lower risk loan.

Q: How important is scalability of solutions to companies in mortgage?

JIM OBSITNIK: Our customers consider Capsilon to be a mission-critical system in their tech stack, so stability and scalability are critical. We built our system to support the largest lenders in the country. Today, more than 15% of mortgages in the U.S. go through the Capsilon system each year. With Capsilon’s scalable infrastructure, our customers can scale with the markets effectively. 

Q: What does it mean for Encompass users that Capsilon is one of the first to be a part of Ellie Mae’s Integrated Partner Program?

GINGER WILCOX: As an early adopter, Capsilon is one of the first technology providers to be fully integrated into the Ellie Mae Encompass Digital Lending Platform. The integration between Capsilon and Ellie Mae allows mortgage lenders to more efficiently and securely share data between Capsilon’s solutions and Encompass to drive quality and efficiency at every stage of the mortgage lifecycle.

Mutual Capsilon and Ellie Mae customers benefit from the seamless integration that removes manual work and time delays between the systems, making it even easier for customers to leverage both solutions.

For example, Encompass customers can now use Capsilon to automate “stare and compare” activities. Companies can immediately access and compare Encompass® data to information within documents, instantly spotting where supporting documents and data don’t match, enabling them to use better data within Encompass and other business applications.

What this means for Ellie Mae customers, and our current mutual customers, is flexibility and options to take advantage of best of breed technologies, in which they can then create a technology stack designed to solve their specific lenders pain points, allow them to create competitive advantages and provide them a platform to proactively respond to the market and their customers. 

Q: What value are companies seeing with Capsilon IQ?

JIM OBSITNIK: Our customers are realizing tremendous gains throughout the loan lifecycle with Capsilon IQ, typically 300-400%. In fact, our good partners at Home Point helped us release a case study. 

The Capsilon IQ platform was integrated with a proprietary tool called Automated File Intake for Home Point’s Correspondent channel. Capsilon IQ was also rolled out across their Wholesale channel.

Home Point reduced Delegated Correspondent purchase review time by 33 percent through integration with Capsilon IQ, improving operational efficiency and delivering a better experience for its clients.

For most Correspondent lenders, the process to onboard loans for purchase review requires significant manual “stare and compare,” and companies invest in significant resources to ensure consistency across key points of data. Typically, more than 50 percent of operational staff time is spent reviewing documents side-by-side, using a checklist to make sure the documents support the data in the LOS and that the data is accurate.

Rather than adding more people to attempt to solve the problem, Home Point expanded its business, choosing to invest in building a software-powered solution, leveraging Capsilon IQ to automate manual work. This solution reduced the ‘stare and compare’ from the purchase review process and significantly improved associate productivity, decreasing file intake time.

“Capsilon has been an innovative partner throughout this process. Their understanding of the mortgage business helped us build a customized solution that boosts productivity across channels,” said Maria Fregosi, Chief Capital Markets Officer at Home Point Financial. “We look forward to continuing our relationship with Capsilon to help provide a better experience for our lender partners.”

We feel this is just the beginning of our quest to help them and others even further.

Q: What’s next for Capsilon?

SANJEEV MALANEY: Our goal is to help our customers automate 80% of the manual work that occurs throughout the mortgage lifecycle. For 2019, we’re continuing to expand functionality in our existing digital mortgage applications to help our customers achieve this goal. And, we have a few other exciting things planned, so stay tuned.

Capsilon Expands Executive Team, Forms New Product Organization

Capsilon has expanded its executive team with the appointment of Sumit Guha as Senior Vice President of Capsilon IQ and the promotion of Steve Viarengo as Senior Vice President of Digital Mortgage Solutions. Guha joins Capsilon’s executive team at a remarkable time in the company’s growth. 

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“In 2018, we made a significant investment in research and development to drive automation for the mortgage industry,” said Sanjeev Malaney, Chief Executive Officer at Capsilon. “As a result, we expanded our product organization to further our growth objectives. Sumit leads our Capsilon IQ product line, where he is focused on enhancing the Capsilon IQ platform, and Steve heads up the development of Capsilon’s Digital Mortgage Solutions. The formation of these new business lines enables the company to improve our core platform continually, while also delivering new solutions that reduce manual work and help lenders make faster, more informed decisions.”

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Steve Viarengo promoted to SVP of Digital Mortgage Solutions

Since joining Capsilon in 2017 as SVP of Product, Steve has been instrumental in driving Capsilon’s evolution from an enterprise-wide document management platform to an end-to-end mortgage automation engine. In his new role, Steve is now leading product development and engineering for Capsilon’s newly formed Digital Mortgage Solutions division where is he focused on building a series of innovative new digital mortgage applications that solve key pain points in the mortgage lifecycle. 

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“The mortgage industry is at a turning point,” says Steve Viarengo, Senior Vice President of Capsilon Digital Mortgage Solutions. “We believe companies who want to compete in the changing market need to adopt a new way of doing business that centers around using perfected data to drive automation. I’m excited to head up Capsilon’s efforts to build solutions that solve the biggest pain points for mortgage lenders, investors, and servicers.”  

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Sumit Guha named Senior Vice President of Capsilon IQ

Based in Capsilon’s San Francisco headquarters, Guha is tasked with serving Capsilon’s current customers and driving ongoing enhancements to the Capsilon IQ platform. Capsilon IQ captures and perfects mortgage data from any source, eliminating manual data entry and comparison, and enabling automation with complete, accurate information. Before joining Capsilon, Guha served as Vice President of Product & Engineering at Duetto, where he led the company’s transformation from supporting a single product to a platform supporting four products and an analytics stack. Guha has helped scale several successful startups including Zuora, DemandTec, NewsCred, and Duetto. 

“I’m thrilled to join Capsilon at such an exciting stage in the company’s evolution,” says Sumit Guha, Senior Vice President of Capsilon IQ. “Capsilon has built a culture of innovation where every team across the company runs on two-week sprint cycles. This approach enables us to rapidly build new technology that helps our customers transform how they work, resulting in more automated processes, massive operational efficiencies, and ultimately, a simpler, faster borrower experience.”

Guha holds a Bachelor of Science degree in physics from the Imperial College London and a Master of Arts from the University of California Berkeley.

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.”

Home Point Financial Partners With Capsilon To Evolve Mortgage Underwriting

Capsilon, a provider of digital mortgage solutions, announced today the beta launch of Capsilon Digital Underwriter, a comprehensive suite of fully integrated cloud-based digital mortgage applications focused on automating the underwriting process. Capsilon Digital Underwriter is being built in collaboration with Home Point Financial and will help lenders and investors make rapid, informed loan eligibility decisions with perfected data.

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“Mortgage underwriting velocity has declined more than 85 percent over the last decade due to increased compliance and regulatory guidelines,” said Steve Viarengo, SVP of Digital Mortgage Solutions. “We’re delighted to collaborate with Home Point Financial to build a solution that will radically speed up mortgage underwriting and enable lenders and investors to make smarter decisions with accurate data.” 

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“We’re excited to partner with Capsilon to make the underwriting process faster and easier,” said Phil Shoemaker, Chief Business Officer of Home Point Financial. “Capsilon Digital Underwriter will significantly improve our underwriting productivity and in some cases, we believe loans can be underwritten without any human intervention. This will enable us to significantly speed up the loan origination process while focusing our talented ops team on providing best-in-class customer service to our business partners, helping them originate more loans.”

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Capsilon’s latest digital mortgage solution increases underwriting capacity and minimizes risk with tools that calculate income, analyze credit, and assess eligibility based on business rules. Capsilon Digital Underwriter runs on Capsilon IQ, the digital mortgage platform that uses machine learning and natural language processing (NLP) to capture and perfect mortgage data, ensuring underwriting rules are only applied to complete, validated information. The source of truth for each data point and its associated evidence are connected with the loan record, maintaining a digital chain of evidence for each decision. 

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“Capsilon is uniquely positioned to solve the underwriting problem with advanced technologies,” said Bill Shuler, Chief Information Officer of Home Point Financial. “You can’t automate underwriting without trusted data. Capsilon elegantly combines the ability to capture and perfect mortgage data with robust automation capabilities. Capsilon has been a great partner to Home Point and we’re excited to collaborate with them on this strategic initiative to digitize the underwriting process.”Capsilon Digital Underwriter is one solution being launched as part of a broader company initiative to develop solutions that solve key points across the mortgage life cycle. As part of this initiative, Capsilon will continue to partner with leading lenders, investors, and servicers to help drive the industry’s digital transformation, creating better experiences for customers and partners while delivering a more-efficient, lower-risk mortgage loan.

Divide And Conquer: How A Data-Supported Work Environment Saves Employees Time And Increases Productivity

We have experienced a fundamental shift in technology during the past two decades. In both our personal and our work lives, there is a whole new set of technologies available and companies are taking advantage of these technologies to gain advantages in their markets. In fact, individual and enterprise access to numerous new tech tools is the new normal.

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According to a McKinsey study, more than 90% of enterprise companies will adopt intelligent process technologies to turbocharge their operations by 2020, creating an Intelligent Work Experience for employees that can significantly drive down costs and increase their productivity.Adopting new technology is the only way for mortgage companies to compete over the long term by shifting from people-powered business to a software-powered business. You’ll see solutions that will help close loans faster, at lower costs, while speeding up cycle times, and providing better experiences for customers and employees. Innovation in consumer portals have helped improve the online application process over the past several years, but the costs of originating a loan continue to skyrocket, and the length of time it takes to close is still not fast enough. 

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Big data and AI can provide significant advantages for mortgage companies that harness technology’s power to make employees more productive. Data is at the heart of getting a mortgage. The borrowers apply for a loan by providing information about income, credit, and assets. The lender then uses this collection of data to make a decision about the loan. When the loan closes, the lender sells or retains the loan in the portfolio. The loan data could subsequently be leveraged to drive repeat business at a later time.

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It is worth noting, however, that while “big data analytics” has suddenly become a go-to catchphrase for many in our industry, our own experience in the space suggests that the challenges associated with implementing and realizing value from big data are more subtle. 

For the past 14 years, we’ve been helping clients collect, validate, and leverage the data to drive workflow automation and improve productivity in the mortgage process. We have an intimate knowledge of the pain points in this process. There remains a series of key friction points that must be addressed for the mortgage process to truly be reinvented, and we’ve been innovating on our clients’ behalf to improve the end-to-end mortgage experience for every user who touches the loan.  

Creating an intelligent process leveraging data and AI helps mortgage companies get leaner, faster, and more profitable. As one of the most complex, largest financial transactions most people make in their lives, getting a mortgage requires the gathering of information, validation and coordination with multiple parties to make a decision, while also meeting multiple regulatory requirements. Many legacy systems are outdated and face several big challenges in the race to modernize. 

Those who succeed will master the harvesting and delivery of relevant data at the right time so every user in the loan process — borrowers, loan officers, underwriters, processors, closing specialists, and delivery — are provided with the tools they need to manage their workload easily and make decisions quickly. This will remove friction in the loan process that bogs most lenders down operationally. With an intelligent document and data management system that provides user-friendly tools to empower its employees, lenders can have confidence in their data quality and can operate with full transparency to accelerate decisions and dramatically increase productivity and lower costs — all without having to rip out existing infrastructure for rapid deployment.   

For example, using a combination of business process improvements and next-generation tools can remove repetitive, replicable, and routine tasks, creating workflow automation with high accuracy rates. Up to 80% of manual processes could be eliminated without replacing existing operating systems, driving significant improvements across nearly every function.

Data-driven technology that creates an intelligent work experience increases employee productivity with automation while helping lenders scale quickly and do more with the same number of employees. Moving from a labor-intensive human powered process to a software-powered model also lowers risks and costs, helping companies survive and thrive in the new era of technology. At the end of the day, the key to innovative technological innovation is about making things easier for our most valuable assets — humans.

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3 Approaches For Lenders Adapting The Next-Gen Mortgage Model: Build. Buy. Renovate.

The mortgage industry is going through a technological transformation. Gone are the days of paper applications; today, 43% of mortgage shoppers start their applications online. Lenders have been racing to modernize their front-end portals to provide a digital experience for their tech-savvy customers — and those tech-savvy millennials comprised 91% of the home purchases in June 2018, according to the Ellie Mae Millennial Tracker report. 

However, while lenders have made significant investments to “improve the customer experience,” this hasn’t fundamentally improved the end-to-end process process. Closing a loan still takes an average of 40+ days, and costs continue to rise. Some savvy lenders are now evaluating automation, which speeds up closings and drives down origination costs. Focusing on improving back-end operational efficiency will take the modern mortgage experience to the next level for both borrowers and employees.

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Choosing the right solution to drive operational changes is not always straightforward, but waiting to modernize and making the wrong move can be costly. To name just a few casualties of this attitude, remember Blockbuster, Dell and, more recently, Toys ’R’ Us?

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Based on what we’ve seen with clients and industry leaders, we believe there are three main options open to lenders and homeowners alike. Here’s an interesting way to think about them: When you know your home no longer meets your needs, your choices are to: build a new house, buy a different house or remodel your existing house.

So what does that mean for the next generation of mortgage platforms? 

Much like a homeowner who’s building a house, some lenders might have a specific vision that none of the solution providers can meet. So one option is to build your own solution. 

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You start by drawing up a blueprint, getting it approved, hiring the contractor and then building your home piece by piece and step by step. The upside is that you get what you really want — a custom solution — but it could be costly and will take longer than buying something that already exists. Still, building your own solution could be the right decision if you have the time and the resources to invest. 

Keep in mind that when you build a home, having a strong foundation is critical. In this example, the strong foundation for your mortgage loan solution would be data. 

Data is at the heart of getting a mortgage. The borrowers apply for a loan by providing information about their income, credit and existing assets. The lender then uses the data collected to make a decision about the loan. When the loan closes, the lender sells or retains the loan in its portfolio. The loan data could subsequently be leveraged to drive repeat business at a later time. Many legacy systems face issues of multiple sources of data, lack of transparency, and difficulty in accessing that data for insights.

Like having a strong foundation for a house, a data-driven solution is core to building a modern technology platform because it gives you confidence in data quality that allows you to accelerate decisions, speeding up the transaction process. And you don’t have to do it alone. General contractors bring in experts like electricians to help them build components of the house. Look for solutions to help ingest data, map data for accuracy, and provide tools to make the data accessible.  

The second option is buying a different house — for example, another existing home in a neighborhood with better schools. It may be easier than building your own, with faster speed to market, but with an existing house, you don’t have the opportunity to customize each room. You may not like the layout of the kitchen even though you got the three bedrooms you needed. 

Important factors to consider when you buy an existing solution include: 

>>Length of time for implementation and configurability options 

>>Smart automation capabilities to minimize mundane tasks for maximum efficiency

>>Whether it has the ability to meet requirements for compliance 

>>Most important of all: Whether this single solution meets your short- and long-term business goals. 

Like buying an existing home, you might just have to live with the awkward kitchen layout, but there is also a third option to consider. 

That third option is to renovate. 

Let’s say you bought a house built in the 1950s. The kitchen is outdated, the bathroom has a pink sink, and the whole place needs a fresh coat of paint. 

Renovating is like a makeover of your existing infrastructure. In my experience working closely with mortgage companies for the past 15 years, we’ve been building technology that leverages data to address major pain points in the end-to-end loan process. By automating up to 80% of the manual, repetitive tasks throughout the loan process, lenders are able to create an intelligent work experience that significantly increases employee productivity, drives down costs, and reduces risk without sacrificing confidence in data accuracy — essentially remodeling your existing infrastructure. This approach can be smart and cost-effective if the goal is to see immediate gains on efficiency and ROI.

In recent years, the common theme around the “renovation” approach has been  focused on the front end for a modern, fresh consumer portal. But mortgage companies with strategic long-term thinking are also examining their options more holistically to improve the end-to-end mortgage experience for both borrowers and employees… because conventional wisdom tells us if you only replace the faucet but keep the old pipes, your kitchen is still not functioning well. 

Whether mortgage companies choose to build, buy or renovate to implement the next-gen mortgage experience will depend on their strategic objectives, resources and timeline. Whatever approach is chosen, one thing is for certain: As competition grows more fierce and the industry experiences consolidation and layoffs, now is the time to invest in the future. 

Those who make the decision to automate and invest in the right technology will gain a competitive advantage and will thrive. 

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Perfecting The Borrower Experience Is All The Rage

As the industry is securely in a purchase market, improving the borrower experience is a key differentiator for lenders looking to close more loans. Prominent mortgage industry executives gathered in Washington, DC at the 8th Annual PROGRESS in Lending ENGAGE Event sponsored by Get Credit Healthy, QuestSoft and Optimal Blue, to really drill down on this industry trend. How can lenders offer a better borrower experience? Here’s what was said:

In talking about other companies outside of mortgage that do it right, Denis Brosnan, CEO at DIMONT, said, “My Dad is Amazon’s best friend. So, when people in this industry say that older folks won’t do things online, they’re wrong. What people don’t want is to call a call center. The biggest thing is to reach out to people. You need to be a professional advisor.”

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“When you think about the customer experience, you really need to white board and draft out the entire process first,” noted Elizabeth Karwowski, CEO at Get Credit Healthy. “From there you need to ask what else can you be doing to get the borrower more engaged. Bring in other folks from outside the industry to give their perspective. We have to create a better journey for the borrower.”

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“Borrowers are with you for 30 days, but LOs are with you for life,” added Joe Wilson, Chief Sales and Marketing Officer at SimpleNexus. “We need to ask: How can LOs create a better experience for borrowers? You have to enable LOs and others within your organization to think more about the borrower if the process is ever going to improve.”

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“We can start by doing a better job with the upfront validation piece,” concluded Eric Christensen, Chief Strategy Officer at LERETA. “The industry has done a great job at the point-of-sale, but that’s where it stops. You can’t just offer the borrower a good experience there and stop. We need to perfect the whole process, including the backend, as well.”

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Who Cares About The Digital Mortgage Anyway?

As the focus turns to increasing efficiency, reducing cost and maintaining compliance, the mortgage industry has become keenly focused on going digital. Prominent mortgage industry executives gathered in Washington, DC at the 8th Annual PROGRESS in Lending ENGAGE Event sponsored by Get Credit Healthy, QuestSoft and Optimal Blue, to really drill down on this industry trend. Why is the digital mortgage such a big deal? Here’s what was said:

Doing a digital mortgage means that you are originating a more compliant loan. “We have 10% post closing QC now, but that’s archaic,” says Leonard Ryan, President at QuestSoft. “We have pushed all that compliance to the frontend. We are not doing that to stop the loan, we’re doing it to get things done right as early in the process as possible. That’s what a digital mortgage does for you.”

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“If you think about it, there are a lot of disparate systems in the mortgage space that all have different functions and purposes,” added Michael Kolbrener, Chief Technology Officer at PromonTech. “A mortgage is the biggest financial transaction that people will do in their lifetime. So, you have to approach it from the standpoint of creating the most efficiency. All of the systems should work together to get and validate the data needed to do that loan. We are in a data business, so we need to use technology that is truly data driven.”

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“Also, we’re dealing with people. A mortgage is very personal and a digital mortgage does not negate that,” continued Jim Obsitnik, COO at Capsilon. “Here at Capsilon we look at the process end-to-end and the common thread is the data. There are a lot of native data sources that we can access. Data is key. You need to drive ROI for the borrower, for the lender, for the LO, for the investor, for everyone. The digital mortgage allows you to achieve that goal.”

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So, how do you do that? “Artificial Intelligence or AI is very new to the mortgage industry, but it’s going to play a critical role,” pointed out Alok Bansal, Vice President and Business Head at Wipro Gallagher Solutions. “We talk a lot about the borrower experience in mortgage today, but this industry is really playing catch up. Take Uber for example, they have automated the entire taxi/transportation process and it’s all transparent to the end user. AI is going to help that happen for mortgage lending.”

The last part of the puzzle is eClosing ad eNotarizing. When will that get broad industry adoption? It’s happening today according to Kelly Purcell, EVP. Marketing and Business Development at NotaryCam. “I’ve been on the eSigning bandwagon since the beginning. D-Day for eSigning really happened back in 2000, but eSigning still didn’t go mainstream right away. We had to educate the industry and move adoption one lender at a time and it was painful at times. Sometimes I felt like I was working at a not-for-profit. I see eNotarization and eClosing the same way. We have reached D-Day and now we’re educating the industry. The difference is that lenders really want to listen and move on this. Full digital mortgages are happening and it is for the betterment of everyone.”

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