Growing Demand
Based on the increasing number of mortgage technology vendors deploying SaaS versions of their software, it seems apparent that lenders see the value of SaaS and are willing to make the switch from other products.

Mortgage Cadence is in the process of its own SaaS transformation. In March, the Denver-based LOS, document preparation, default servicing and compliance software company launched a SaaS LOS for midsize lenders called Symphony.

Meanwhile, it’s enterprise-level LOS, called Orchestrator, is migrating from a sit client that’s hosted on lenders’ own servers to a SaaS application hosted by Mortgage Cadence. Both products are accessed through Web browsers.

“We’ve been moving towards the Web, strategically because that’s where the market is going, but it also makes sense from a support, infrastructure and deployment strategy,” said Rob Jannotte, executive vice president of product management at Mortgage Cadence.

Added Trevor Gauthier, the company’s executive vice president of enterprise sales and marketing, “The original market that Mortgage Cadence was going after eight or 10 years ago was the top 100 lenders. When we were going after those, they wanted to take our application and host it in-house. That’s how everybody was doing it.

“Over the years, and especially now, even when you get into the enterprise world about 90% of our client base want us to host and manage and they just want to access it over the Internet,” Gauthier added.

The shift to SaaS technology is happening at Ellie Mae as well. According to the company’s first-quarter 2011 financial results, lender use of its software- as-a-service LOS has increased to more than 11,100 mortgage professionals at the end of 1Q11, from 2,738 at the end of 1Q10 and 8,704 at the end of 4Q10.

At the Department of Housing and Urban Development, a browser- based SaaS application was launched in summer 2010 to facilitate transmission of documents between HUD’s Mortgagee Compliance Manager—a vendor that oversees disposition of Federal Housing Administration REO properties—and mortgagees and their vendors performing maintenance on real estate owned properties, called P260.

The portal replaced a disparate system of faxes and standalone emails for communication about foreclosures, preservation service reimbursement and other disposition tasks, Walsworth said.

Previously, those emails and faxes would go to the servicer, which would manage the documents. Now, Five Brothers handles all that data entry as a service to its customers. To facilitate that work, the company created a process that automates many of the steps needed to upload the information from FiveOnline and pass it on to P260.

Development Challenges
Developers face unique challenges when building technology for either type of SaaS application. While browser- based applications offer virtually ubiquitous accessibility, it comes at the expense of developers’ ability to build specialized features.

“You do give up some flexibility because you can’t control what the screen resolution of the end user is on a browser,” Schmidt said. “You can code toward a minimum standard, but you don’t know on the outside exactly what screen resolutions, software they have installed or what operating system they’re coming from, whether it’s a Mac or a Microsoft Windows platform.”

While there are differences in the way a screen might appear to an end user, he added that what’s more important is gathering the data.

“In all cases, it’s still going to be aesthetically appeasing,” Schmidt said. “It’s not going to look the same way every time, but it’s not going to look bad in any case.”

There were significant architectural differences in the early development of Web browsers, making it difficult for Web application developers to write to multiple platforms. Those problems have generally subsided as browsers have evolved, though most application developers still test their products on multiple platforms.

The bigger problem is when a lender isn’t using the most current version of a browser. Many IT departments lock down employees’ ability to update their browser, leaving them with outdated versions.

In order to promote accessibility, developers have to write to a common standard among browsers and versions, many times losing the ability to take advantage of functions in the latest editions of a browser.

“Even within the same type of browser, if you look at IE 7 versus IE 8 or 9, there are differences,” Schmidt said. “We always go in and when we test our system, we test on all platforms because there are differences between them.”

To find the middle ground between the two extremes, developers may have to hold off updating a critical component to take advantage of the latest browser features.

Other times, developers will design the user interface of a Web-based application to appear differently, depending on the capabilities of a specific browser version, keeping it simply for old versions and more advanced for the new editions.

“It’s still within the one code base, but it’s like two different versions,” Schmidt said. “But that’s pretty standard.”

Mortgage Cadence’s Jannotte said the mortgage industry is filled with different levels of technological sophistication, particularly across lending channels.

“We’ve got clients that are on IE 9 and Windows 7 and we’ve got clients that are on much older operating systems and much older machines,” he said. “In the world of wholesale, which lenders have no control over, you still have a fair amount of the market using old technology.”