Lenders have plenty to think about as we move into 2019. Costs are still way too high, volumes are down, and future interest rates are impossible to predict, though remain historically low. Despite all of this, they are still eager to innovate. In fact, now is the perfect time to innovate, a great way to get ready for this year’s home buying season. The question is: what decisions are crucial to innovation and which are just background noise?
A recent opinion piece in National Mortgage News discusses what technology considerations require the industry’s immediate attention, with the need for lenders to remain current on their technology platform’s latest release topping the list.
We couldn’t agree more. Fortunately for an increasing number of lenders, this should be a non-issue. While all of the firms that currently offer mortgage technology started out offering standalone applications that resided behind the lender’s firewall, most advanced software today is offered as a service. Mortgage Cadence pioneered Software as a Service (SaaS) before the term was coined when we launched our first borrower portal in 2002.
Back to why SaaS is important. With a true SaaS option, new updates are automatically applied to lenders’ technology. There’s less involved on the lender side to ‘take’ the upgrade. Sure, testing is still important, and tantamount. But the actual release itself is done once for all lenders on a platform as opposed to each lender’s IT teams deploying it one at a time over what tends to be a long period of time. This is ideal for lenders because they ‘automatically’ get the most efficient, advanced version of the technology without adding an upgrade to their growing to-do list.
TRID was the last best example of why remaining current is so important. URLA is the next example, just as important in terms of borrower experience and lender processes, though it impacts a different portion of the lending process than did TRID. Technology providers have been working hard to implement the extensive changes necessary for compliance with the GSE mandate by the URLA effective date. Without automatic updates for lenders, those lenders that lag behind current releases will not remain compliant.
Beyond being up to date on releases, lenders who are not utilizing a true SaaS loan origination option take on additional burdens when it comes to regulatory and GSE changes like URLA. Not only may they find themselves behind on releases, but they may also be responsible for determining what changes need to be made and how to implement them. Decoding the ins and outs of the multifaceted loan application changes, updating all documents and creating new workflows around the updated documents are just a few of the complex tasks involved in remaining compliant come the 2020 URLA implementation date.
As you can see, lenders that haven’t yet moved to a SaaS-based platform have bigger problems than upgrading to the latest version of their already outdated LOS. In fact, making the decision to use a true SaaS solution sets the stage for innovation. Why not let technology companies handle the technology, so that loan originators can spend their time figuring out how to become high performance lenders. The technology exists today and there are lenders doing it. That makes a lot more sense than trying to keep up on a treadmill that’s powered by yesterday’s loan origination software.