How should lenders utilize their current technology functionalities before deciding to invest in additional tools?
As we approach the end of the year, every management team is completing their budgets for the new year and making decisions about what additional investments will be required to reach their goals.
Making the most of everything the company has already invested in is a best practice that should be applied during this process. It doesn’t make sense to invest in new technologies, for instance, if the tools you already have can do the job.
This is one area in which the mortgage industry can improve. Virtually every lender I have visited has told me that they currently have made investments in tools that are either facing adoption challenges or, if they are adopted, their users are not using all of the functionality built into them.
It’s important to deal with this issue before deciding to invest in additional tools.
I’m not talking about core systems here. If the lender’s LOS is incapable of meeting its needs or if the lender wants to expand the business in a way that is difficult or impossible with their current platform, then a new investment is required.
It’s the many other technologies the lender has invested in that I’m addressing here. Unless all the lender’s existing tools have been evaluated through the lens of the institution’s goals for the future, it will be very difficult to make a good decision about what to invest in next.
This is an important exercise because there are some very exciting new technologies available to lenders today that would meet all aspects of their needs. If the lender doesn’t already have access to these tools and if they are not already built into the next generation LOS at the core of their operation, they may want to consider investing.
We have discussions every day with lenders considering an investment in a new tool who don’t know that the functionality they want is already built into their modern LOS.
Many lenders don’t realize that what they want has been built into the new breed of loan origination software since it was not part of these platforms in the past. Here are a few examples.
In the past, verifying income and assets was handled either manually or by an external system that would often provide a report that the loan processor would have to key into the LOS. Not today. The modern LOS already includes a number of verification tools that make it easy for lenders to get this information digitally, loaded directly into their database of record.
Another class of functionality built into the modern LOS is collateral valuation. Instead of dropping out of the LOS in favor of an appraisal management system or the portal for the lender’s Appraisal Management Company, next generation LOS software has this built in.
Why aren’t more lenders using these tools instead of investing in something new? Many don’t know they have it or haven’t effectively trained their staff to use it. Most developers are more than willing to send trainers out to help lenders get the most out of their software.
While it might have been very difficult for a lender to spend time training in 2021 when volumes were through the roof, it’s much easier in today’s environment.
In fact, there is no reason, given the capacity and demand environment that we're in today, that lenders shouldn't be focusing more attention on getting the most out of their modern LOS. Now is the time to build good habits that will see these tools utilized to their fullest.
In the end, this will allow them to make better investment decisions and save time and money that would be better spent on marketing.
By Joe Camerieri, EVP, Sales & Strategy at Mortgage Cadence
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